SINGAPORE: Oil was up in Asia on Tuesday but prices remain hobbled by weak demand and excess supplies.
US benchmark West Texas Intermediate for delivery in October climbed 24 cents to $44.24, while Brent crude for October clawed back from earlier losses to rise one cent to $46.31 in afternoon trade.
Expectations that US crude oil inventories expanded for a third week and news that the OPEC cartel has slashed its demand growth forecast for next year are keeping a lid on any price rally, analysts said.
Bloomberg News said it expects US crude stockpiles to have risen by 1.75 million barrels in the week to September 4.
The US Energy Information Administration (EIA) will release Wednesday the official stockpiles data, a gauge of demand in the world’s top oil consuming nation.
“Prices are unable to make much headway as the market expects US crude stockpiles to expand for the third straight week ahead of the EIA report,” said Bernard Aw, a Singapore-based market strategist at IG Markets.
The Organization of the Petroleum Exporting Countries on Monday cut its 2016 forecast for global demand “due to the projected slower economic momentum in Latin America and China”.
The cartel said demand would grow by 1.29 million barrels per day to 94.08 million barrels a day next year, 50,000 barrels less than its previous estimate.
Traders meanwhile are also watching a US central bank meeting this week to see whether policymakers would raise interest rates for the first time since 2006.
Analysts say that a hike in the zero-level benchmark rate would likely push the dollar higher, making dollar-priced crude oil more expensive and potentially further damping demand.