Crude prices rose in Asian trade on Friday on encouraging US corporate earnings, but analysts warned that worries over demand in the world’s top oil-consuming nation would cap further gains.
New York’s main contract, West Texas Intermediate (WTI) for delivery in December, was up 25 cents at $97.36 in afternoon trade, while Brent North Sea crude for December gained 26 cents to $107.25.
“We have seen prices move up with buying off the lows and better-than-expected US earnings, but I don’t see this as the market bottoming out after the recent decline,” Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.
“There are still concerns about weak US demand and the return of a US budget impasse a few months down the road,” he said.
US oil prices shook off three consecutive sessions of declines to close 25 cents higher in New York trade on Thursday, following encouraging quarterly earnings from leading US companies including automaker Ford and consumer product manufacturer 3M.
WTI has shed more than $3.50 from a week ago, and hit its lowest closing level since June 28 on Wednesday, following a surprising increase in US inventories.
The US government’s Department of Energy weekly survey Wednesday showed that American crude reserves had soared by 5.2 million barrels in the week ending October 18.
The increase also came on the heels of a Monday report for the prior week, delayed by the partial US government shutdown, that showed another big rise in US inventories.
A rise in stockpiles indicates weak demand in the world’s biggest economy, putting downward pressure on prices.