SINGAPORE: Oil prices rose in Asia on Friday but a supply glut and clearer hints the Fed might raise interest rates next month limited gains.
US benchmark West Texas Intermediate for delivery in December was trading 21 cents higher at $45.41 and Brent crude for December was up 21 cents to $48.19 at around 4:30 a.m. local time.
Prices, however, are lower compared with the previous week as the market struggles with a crude oversupply and weak demand due to sluggish global growth led by top energy guzzler China.
Increasing talk of an interest rate hike by the US Federal Reserve has also bolstered the dollar, making dollar-priced oil more expensive for weaker currencies, hurting demand and prices.
A meeting last month of the policy-setting Federal Open Market Committee (FOMC) hinted that a decision to implement the first rate hike since 2006 could be made during a December meeting.
Comments this week by Fed chair Janet Yellen and New York Fed president Bill Dudley considered as “hawkish” by the market have firmed up expectations for the December FOMC meeting “as a live possibility for the first Fed rate hike in nearly a decade,” Singapore’s United Overseas Bank said.
Markets are watching the US non-farm payrolls data to be released later Friday for further signs about the health of the US economy which could help swing any decision on interest rates, it said.
The data is a closely watched gauge of the unemployment situation in the world’s biggest economy and top oil consuming nation.
Oil prices have plunged by more than half from peaks of over $100 a barrel in June last year.
The International Monetary Fund has projected slower growth for the world economy this year and next.