LONDON: Oil prices recovered further on Tuesday ahead of an expected and long-awaited hike in the main US interest rate.
Prices had already begun rebounding late in New York on Monday from levels below $35.
With global oversupply still dictating price trends, US benchmark West Texas Intermediate for delivery in January was up 79 cents at $37.10 a barrel in Tuesday trading.
At around 1700 GMT, Brent crude for January stood at $38.58, up 66 cents compared with Monday's close.
WTI had Monday fallen briefly below $35 a barrel, hitting the lowest levels since February 2009 during the global financial crisis.
An anticipated US interest rate hike on Wednesday could put further pressure on oil demand. Higher borrowing costs should support the dollar, making oil priced in the unit more expensive for holders of rival currencies.
BMI research meanwhile said in a report that more downside pressure for crude is expected in the coming months.
"Oil prices will remain anchored by oversupply," it said, predicting that the global surplus "will only narrow significantly post-2018".
Prices have fallen more than 60 percent from levels above $100 in June last year owing to slack global demand and a slowdown in key markets including China.
Also, the world market is awash with the commodity as the OPEC exporters' group refuses to cap production in a move to preserve its market share, while Iran is expected to restart pumping its own crude for shipment in 2016 after sanctions linked to its nuclear programme are lifted.
Comments
Comments are closed for this article.