Oil prices crept higher in Asia Wednesday but still struggled near multi-year lows as analysts warned the weakness will continue past next year.
The gains come ahead of a report later in the day on US crude inventories, with expectations of a further build-up in the already saturated market.
A decision by the OPEC oil producers group during their meeting last week not to slash output levels has left the commodity wallowing, with the group deferring any action to their next meeting in June.
US benchmark West Texas Intermediate for delivery in January was trading 64 cents higher at $38.15 and Brent crude for January was up 48 cents at $40.74 at around 0630 GMT as dealers hunted for bargains after prices fell to their lowest in nearly seven years this week.
On Tuesday, Brent dropped briefly below $40 a barrel for the first time since February 2009.
“We believe that the current crude oversupply in the global market will persist over the coming years, reinforcing our flat outlook for oil prices over 2015-2017,” BMI Research said in a market commentary.
“This view was reinforced by the conclusion of the December 4 OPEC meeting in which the cartel chose to continue its policy of non-intervention in the market, postponing major decisions until the next scheduled meeting in June 2016.”
Members of the Organization of the Petroleum Exporting Countries are currently producing an estimated 32 million barrels per day, above the group’s prior 30 million target.
OPEC did not set a new production ceiling at Friday’s meeting in Vienna.
Dealers also have an eye on next week’s Federal Reserve policy meeting, with expectations it will raise US interest rates.
A hike would typically support the dollar, making oil — which is priced in the greenback — more expensive for those holding weaker currencies, hurting demand.