U.S. oil prices edge up on Paris attack tensions, but market remains oversupplied

Image: Oil rigs and platforms are seen at Maracaibo’s lake near the western city of Maracaibo January 2, 2008. REUTERS/Isaac Urrutia

 

By Henning Gloystein

SINGAPORE (Reuters) – U.S. crude oil prices edged up in early trading in Asia on Tuesday, lifting it further away from over two-months lows seen last week, as traders price in a risk premium following the Paris attacks and the resulting French airstrikes in Syria.

Despite the lift, analysts said that prices would likely remain at low levels as oil markets remain oversupplied, with most estimates for 2015 ranging from production outpacing demand by 0.7-2.5 million barrels per day, and many speculators have positioned themselves for further price falls.

Front-month U.S. crude futures were trading at $41.87 a barrel at 0032 GMT (0732 ET), up 14 cents from their last close and $1.13 a barrel above last week’s more than two-month low.
“Oil prices are likely to remain volatile amid rising geopolitical tension post the Paris attack,” ANZ bank said on Tuesday, but added that “the upside in prices is limited as Syria’s oil output is less than 25,000 barrels a day, and the market is heavily oversupplied.”

Money managers cut their net long U.S. crude futures and options positions to the lowest in three months during the week to November 10, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.
The speculator group cut its combined futures and options position in New York and London by 27,456 contracts to 127,351 during the period.

The cut in bets on higher rises has come in parallel to soaring amounts of contracts actively betting on a further fall in oil prices.

DATA/EVENTS * The following data is expected on Tuesday (GMT):
1000 Germany ZEW economic sentiment Nov
1330 U.S. Consumer prices Oct
1415 U.S. Industrial output Oct
1500 U.S. NAHB housing market index Nov

(Editing by Michael Perry) 

Copyright 2015 Thomson Reuters. Click for Restrictions.

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