By Seher Dareen
LONDON (Reuters) -Oil prices rose on Tuesday, after a fall in the previous session, on easing concerns about an oversupplied market and the trade dispute between the U.S. and China, the world’s top two oil consumers.
Brent crude futures were up 33 cents, or 0.54%, at $61.34 a barrel at 1150 GMT. The U.S. West Texas Intermediate crude (WTI) contract for November delivery, set to expire on Tuesday, was up 54 cents, or 0.9%, to $58.06.
Prices hit the lowest since early May on Monday on the concerns about oversupply and slowing economic growth resulting from an escalation in the U.S.-China trade dispute and OPEC+ pushing ahead with plans to add more oil to the market.
US CRUDE STOCKPILES LIKELY ROSE LAST WEEK
Both WTI and Brent have shifted to contango market structures, where prices for immediate supply are lower than for later delivery and which typically indicate that near-term supply is abundant and demand is declining.
Still, some analysts said the concerns over an oil glut were overblown.
Ole Hansen, head of commodity strategy at Saxo Bank, said the market structure had not yet shifted to levels that would encourage large stock builds.
“This may signal a market reluctant to fully price in the anticipated surplus — perhaps reflecting expectations that the glut will prove smaller than feared,” he said.
The International Energy Agency’s forecast for a massive surplus would lead to a strongly upward-sloped futures curve, called super contango, but that has not emerged so far, UBS analyst Giovanni Staunovo said in a note.
One of the main factors supporting the market has been oil inventories and fuel demand. A preliminary Reuters poll on Monday showed that U.S. crude oil stockpiles likely rose last week while those for gasoline and diesel are expected to fall, ahead of weekly reports from the American Petroleum Institute and the EIA.
For the week ending October 10, crude builds were more than expected, while gasoline and diesel stocks declined more than forecast. [EIA/S]
(Reporting by Sam Li in Beijing, Ashitha Shivaprasad in Bengaluru. Editing by Louise Heavens and Mark Potter)
