Oil – weak recovery in Asia amid oversupply concerns

Oil prices at both the sides of the Atlantic are up slightly in Asian trade following a drop below $40/barrel in the NY session yesterday.

At the time of writing, WTI oil was up 14 cents or 0.35% at $40.20/barrel. Brent oil was up 24 cents or 0.57% at $42.38/barrel.

Prices have dropped 22% in less than two months, ending a rally that took prices above $50 in early June.  This time the culprit is the gasoline glut, which as per experts could drown oil market rebalancing. The Baker Hughes data on Friday also showed a fifth weekly rise in oil rigs.

Fresh excess supply concern makes it difficult for prices to extend the recovery seen in Asia. Europe and US desks usually respond to minor uptick in Asia by selling more.