REUTERS
Oil prices edged away from multi-year lows on Tuesday as the northern hemisphere moves into the peak-demand winter season, but mild weather and ballooning supplies mean that prices are expected to remain generally low well into 2016, Reuters reported.
The oversupply has already pushed down oil futures by more than 30% this year, according to Reuters.
Brent futures LCOc1 were at $36.46 per barrel, off an 11-year low of $36.04 hit on Monday. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $36.04 per barrel, up from 2009 lows of $33.98 hit in the prior session.
Analysts say further large price rises are unlikely given an unusually mild start to winter in the northern hemisphere.
BNP Paribas said the number of U.S. and European heating days had been 30% and 39% below the 10-year average since December 7, respectively, and that days requiring heating were expected to remain 23-24% below normal until January 4, Reuters writes.
"In the next two weeks ... the U.S., Europe and Russia will be particularly milder than normal," the bank said.
At the same time, the oil supplies are expected to grow soon once Iran's oil exports start to fully return after a lifting of western sanctions against Tehran. Bank of America Merrill Lynch said Iranian output could rise by 600,000 barrels per day (bpd), from a current volume of around 1 million bpd within six months after sanctions end, according to the report.
Read alsoBrent oil slides to 11-year low as producers seen worsening glutThe International Energy Agency said that it expected Iran's exports to rise by half a million bpd within 6-12 months of sanctions being lifted.
U.S. crude prices have been firmer relative to their Brent equivalents recently, supported by a fall in drilling for shale oil this year. Prices were also supported by a congressional vote to end a 40-year-old ban on U.S. crude exports.
Read alsoCollapse in oil prices threatens to drag Russian economy down to lower depthsMany analysts expect the Brent premium over U.S. crude to flip into a discount soon, but with both benchmarks remaining at low levels until late 2016 at the least, Reuters reported.