Investing.com - Oil prices rose on Wednesday morning in Asia, despite concerns over a global supply glut and an economic slowdown.
Crude Oil WTI Futures for February delivery edged up 0.02% to $46.61 per barrel at 10:37 PM ET (02:37 GMT) on the New York Mercantile Exchange, after hitting $46.23 at around 6:00 PM ET, marking the lowest point since July 2017.
London’s Intercontinental Exchange showed that Brent Oil Futures for February delivery also rose 0.71% to $56.42 a barrel, after dropping to $56 at 6:00 PM ET, which was the lowest point since October 2017.
“The toxic combination of oversupply worries, and global growth distress should see oil prices languish into year-end,” Stephen Innes, head of trading for APAC at Oanda, told Reuters. “A negative momentum is leading price action.”
U.S. crude stocks climbed last week, according to the American Petroleum Institute numbers out on Tuesday.
Despite the market’s fears of oversupply, Saudi Arabia remained optimistic about oil profits next year.
The kingdom estimated that oil would average about $80 a barrel next year if its production stays at 10.2 million bpd and Saudi Aramco, its state-owned oil firm, keeps the current allocations to the government, according to Ziad Daoud, Bloomberg’s chief economist in the Middle East. He also said that oil would need to trade at over $95 per barrel for Saudi to balance its budget.
Saudi Arabia’s King Salman announced on Tuesday the 2019 budget for the country, which raised state spending by over 7% to $295 billion. The Ministry of Finance said that the kingdom’s oil revenues this year reached SR608 billion (US$162 billion), a 38% jump year-on-year.
Saudi Arabia and its allies in the OPEC agreed on an output cut earlier this month to prevent a global glut and balance oil prices.