Oil prices edge up after 5 per cent fall amid high production, weak outlook

Oil prices edged up in early Asian trading on Tuesday following a sharp 5 per cent drop in the previous session, as high global production and a weakening economic outlook, especially in Asia, prompted analysts to warn of further falls.

Oil output by the Organization of the Petroleum Exporting Countries ( OPEC) reached the highest monthly level in recent history in July, and production could rise further if Iran achieves a plan to raise output by 500,000 barrels per day (bpd) as soon as sanctions are lifted.

With US production also near records and China’s economy showing further signs of slowing, prices on Monday were pulled down to within a few dollars of the six-year lows touched at the start of the year. Brent fell below $50 per barrel for the first time since January

Although prices rose on Tuesday, with Brent 28 cents higher at $49.80 a barrel by 0336 GMT and US crude up 35 cents at $45.52 a barrel, analysts said more falls were expected.

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Posted in: Indian Market Tips