Crude oil prices held above $46 a barrel in Asia today ahead of a report on US commercial crude inventories, a closely watched indicator of demand in the world’s top consumer.
A decline in US drilling activity has supported prices recently, fuelling hopes a fall in production would help ease the global crude supply glut.
US benchmark West Texas Intermediate for November delivery see-sawed in between negative and positive territory and was up two cents at $46.28 in late-morning trade. Brent crude for November advanced 13 cents to $49.38 a barrel.
The US Department of Energy will release its weekly stockpiles report tomorrow, giving a better idea about demand in the world’s biggest economy.
The report will probably show that inventories rose two million barrels in the week to October 2, a Bloomberg News survey showed, indicating slowing demand.
Reports that producer Russia was willing to discuss the global supply glut situation that has been weighing on the market also supported prices.
Daniel Ang, an investment analyst with Phillip Futures in Singapore, said the return of Iranian oil after it complies with an agreement on curbing its nuclear programme, is likely to be part of any talks.
“Oil prices dropping to this level and staying here for a prolonged period of time is definitely hurting major oil producers, Russia included,” Ang said in a market commentary.
Ang expects Iranian oil “to cause a one million barrel per day surplus of supply when Iran reaches maximum capacity and this would likely be the key topic of any meeting’’.
Crippling economic sanctions imposed by the west on Iran have restricted the country’s oil exports, but its compliance to the terms of a landmark agreement reached in July could see the sanctions lifted.