Oil edged higher towards $42 a barrel on Wednesday after hitting its lowest since April the previous day, supported by an industry report showing a fall in U.S. inventories and a weaker dollar.
But prices could struggle to make much headway, analysts said, as sentiment remains bearish. A supply glut that has weighed on prices could increase if oil exports restart from ports in Libya that have been closed since 2014.
Brent crude LCOc1 was up 11 cents a barrel at $41.91 at 1121 GMT (0721 ET). It reached $41.51 on Tuesday, the lowest since April 18. U.S. crude CLc1 added 13 cents to $39.64.
“The sentiment is still quite negative and depressed on oil prices,” said Eugen Weinberg, analyst at Commerzbank.
“There are factors which should be supportive, but at the moment I think there is no single (piece of) news which would convince the bears that the decline is over.”
The U.S. dollar stayed close to a six-week low against a basket of currencies, lending oil some support. Weakness in the dollar makes dollar-denominated commodities cheaper for other currency holders.
via Reuters
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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