Oil price holds above $48 as market stabilises

Brent crude futures held above $48 on Tuesday as a weaker dollar offset the im- pact of a global supply glut, with traders questioning if the nearly 60 percent price fall since June has run its course, reports Reuters. Brent hit $45.19 on Janu- ary 13, the lowest since 2009 and down from a June 2014 peak of $115.71, but has since traded in a narrow band of $47-$50.62. “The market is looking for the right momentum to push oil prices higher,” said Hans van Cleef, senior energy economist at ABN Amro Bank in the Nether- lands. He said the fact Brent was slightly higher on Tues- day did not necessarily mean the rout was over yet. “We’re still closing lower every week compared to the week before.” Brent futures LCOc1 were trading at $48.28 a barrel, up 12 cents, by 1438 GMT. U.S. West Texas In- termediate (WTI) crude futures CLc1 were up 25 cents at $45.40 a barrel. Oil prices have slumped nearly 60 percent since peaking in June, driven lower by ample supplies from the U.S. shale oil boom and a decision by the Or- ganisation of the Petroleum Exporting Countries (OPEC) not to cut output quotas. OPEC secretary-general Abdullah al-Badri said on Monday that oil prices may have reached a floor and warned of a spike to $200 a barrel if investment in new supply capacity was too low. Analysts were more bearish. Swiss bank UBS said it could take several years for prices to recover as it lowered its 2015 forecasts for Brent to $52.50 a barrel and WTI to $49 a barrel. “We do not forecast oil prices to reach $90/$85 Brent/WTI until 2018,” the bank said in a note to clients. Germany’s Commerz- bank said it expected prices to rise during the course of the year, but not in the short term.