SINGAPORE, Aug 8, (APP/AFP): Oil edged higher to near $42 a barrel in Asia Monday but analysts said the increase was unlikely to last as the commodity remains under pressure by a supply glut and a strong dollar.
Prices have been fluctuating since entering a bear market last week, falling more than 20 percent and closing below $40 a barrel for the first time since April.
Initially recovering as US commercial crude inventory data showed an unexpected draw in gasoline, prices tumbled again later in the week after robust hiring numbers from the US government pushed the dollar higher.
A stronger greenback typically makes dollar-priced oil expensive for consumers using other currencies, denting demand.
Weekly rig count data released Friday also showed that US drillers added seven rigs that week, up for the six-straight week and indicating higher production activity amid an oversaturated market.
“Modest short covering has probably given oil some boost,” said IG Markets analyst Bernard Aw, adding however, that the bounce was unlikely to last.
“Rising US rig additions, low probability of OPEC to revive… freeze output talks, and weakening demand present a great barrier for oil prices to move higher,” he told AFP.