Oil prices advance in midday deals

London: The oil market rose on Friday but gains were limited by the global supply glut and after the US Federal Reserve hinted at a December interest rate hike.


In midday deals in London, Brent North Sea crude for December won 44 cents to stand at $48.42 per barrel.

US benchmark West Texas Intermediate for delivery in December rose 26 cents to $45.46 per barrel compared with Thursday´s close.

Despite the slender gains, prices are lower compared with the previous week as the market struggles with a crude oversupply and weak demand owing to sluggish global growth led by top energy guzzler China.

Increasing talk of an interest rate hike by the US Federal Reserve has also bolstered the dollar, making dollar-priced oil more expensive for weaker currencies, hurting demand and prices.

A meeting last month of the policy-setting Federal Open Market Committee (FOMC) hinted that a decision to implement the first rate hike since 2006 could be made during a December meeting.

Comments this week by Fed chair Janet Yellen and New York Fed president Bill Dudley considered as “hawkish” by the market have firmed up expectations for the December FOMC meeting “as a live possibility for the first Fed rate hike in nearly a decade,” Singapore´s United Overseas Bank said.

Markets are watching the US non-farm payrolls data to be released later Friday for further signs about the health of the US economy which could help swing any decision on interest rates, it said.

The data is a closely watched gauge of the unemployment situation in the world´s biggest economy and top oil consuming nation.

Oil prices have plunged by more than half from peaks of over $100 a barrel in June last year.

The International Monetary Fund has projected slower growth for the world economy this year and next.