Investing.com - Crude oil prices edged higher in Asia on Tuesday with investors cautious after bearish supply forecasts unsettled the market overnight and ahead of industry data on U.S. stockpiles.
The American Petroleum Institute will release its estimates of U.S. crude and refined stockpiles late Tuesday, with the U.S. Department of Energy to release its own more closely-watched figures on Wednesday.
On the New York Mercantile Exchange, WTI crude for September delivery rose 0.09% to $43.17 a barrel.
Overnight, crude futures fell sharply on Monday, slumping to a fresh three-month low, as continuing fears related to global oversupply and a resurgent U.S. Dollar remained in focus.
On the Intercontinental Exchange (ICE), Brent crude for October delivery wavered between $44.98 and $46.27, a barrel, before settling at $45.17, down 0.92 or 1.93% on the day. Both the international and U.S. benchmarks for crude extended losses on Monday after tumbling by approximately 3% last week.
In Monday's session, crude fell to its lowest level since late-April as investors responded to further signs of a supply glut on global energy markets.
Over the weekend, analysts from Morgan Stanley (NYSE:NYSE:MS) issued stark warnings on continued oversupply among refined products, as gasoline stocks swelled to a five-year high. It came after gasoline inventories nationwide rose by 0.91 million barrels last week, following a 4.1 million spike in distillate fuel stockpiles over the previous week – representing the largest weekly build in more than five months. The latest trends have exacerbated fears that refineries will slow their pace of oil purchases in the coming weeks, dragging down the cost of crude.
"Crude oil demand is trending below refined product demand for the first time in three years," Morgan Stanley wrote. "Refineries are the true consumer of crude oil, and crude oil demand is ultimately more important than aggregate refined product demand for oil balances. Given the oversupply in the refined product markets, fading refinery margins, and economic run cuts, we expect crude oil demand to deteriorate further over the coming months."
As a result, the analysts predicted global crude demand will rise modestly by 625,000 barrels per day in 2016, far below forecasts from the International Energy Agency (IEA) of 1.3 million bpd for the year. WTI crude has rallied from a 13-year low of $26.05 a barrel in mid-February in part due to improved signs that a massive supply-demand imbalance had begun to level.
Elsewhere, investors reacted to developments out of Libya on Monday after Petroleum Guard Commander (PFG) Ibrahim Jathran announced that the national oil guard is ready to halt a lengthy blockade of three main ports in the Northern African nation.
The statement came several days after officials at Libya's National Oil Corporation (NOC) told the United Nations that sending payments to Jathran could set a "terrible precedent," in encouraging militia groups to seize control of oil facilities throughout the country in attempts to receive significant bribery payments from the government. Attempts from Jathran's forces to close numerous pipelines and oil fields around Libya have reportedly cut crude output to less than a quarter of the level from when former president Muammar Gaddafi was overthrown in 2011.