Crude oil prices
rose on Tuesday after the head of OPEC predicted the market will be more balanced
next year and the U.S. energy department said domestic output is likely
to decline further. However, the upside was capped as the market remains largely in glut.
U.S. crude was last up 0.67% to trade at $44.12 a barrel, after falling about 1 percent on Monday to $44.15 for a fourth consecutive decline.
Brent crude, the global benchmark, was last up 0.22% at $48.02 a barrel. The contract slipped 0.5 percent on Monday to $47.19 a barrel, also falling for four trading days in a row.
Analysts agree that the news flow does not provide any fundamental change which would reverse the bearish sentiment.
Expectations of a rate increase in the U.S., further evidence of
stockpiling, and sluggish economic
growth have helped press down prices in the previous week.
At the same time, remarks from OPEC Secretary-General Abdullah al-Badri on Monday did provide a little bullish relief to the market.
"The expectation is that the market will return to more balance in 2016," al-Badri said in a speech in the Qatari capital Doha.
He added that there is evidence of "global oil demand maintaining its recent healthy growth. We see less non-OPEC supply. And we see an increase in the demand for OPEC crude."
Badri said that most of the oil supply increases in recent years have come from high-cost production, Badri said, citing supply sources such as U.S. shale oil.
According to the U.S. Energy Information Administration
(EIA), shale production is likely to decline for an eighth month in a row in December.
Total output is expected to decline by 118,000 barrels per day (bpd) in December, the biggest monthly drop on record, to 4.95 million bpd, the least since September 2014, according to EIA data going back to 2007.
