HONG KONG: Oil prices edged up on Friday but gains were tempered by ongoing concerns about a global supply glut and a pick-up in the strength of the dollar.
US benchmark West Texas Intermediate for August delivery rose five cents to $50.96 a barrel and Brent crude for September, a new contract, advanced 16 cents to $57.08.
Crude investors continue to fret as the global economy struggles to get back up to speed, despite a strong pick-up in the United States, the world’s biggest oil consumer.
While fears over the Greek debt crisis abate, prices took a hit this week after crude-rich Iran and world powers agreed a historic deal to check the country’s nuclear ambitions, which in turn eases crippling sanctions on its crucial oil exports.
Expectations that Iranian crude would hit an already saturated market spooked dealers, although those worries subsided slightly on the realization it would not arrive until next year.
“There is a genuine focus back on the glut,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, told Bloomberg News.
“In the absence of solid economic data, it’s very hard to see prices going higher.”
Adding to the supply worries, the US Energy Information Administration said Wednesday stockpiles in Cushing, Oklahoma, the delivery point for WTI futures and the biggest oil storage center in the US—climbed again in the week to July 10.
A rally in the US dollar—after Federal Reserve head Janet Yellen said interest rates would rise by year’s end—also kept crude rates tempered.
A strong greenback, at highs not seen since early June, makes dollar-priced oil more expensive for traders using other, weaker currencies.