Oil edges higher as market weighs weak demand, potential supply disruption

Oil prices edged higher on Thursday as the market balanced weak demand with supply disruption amid a looming rail stoppage in the United States, the world’s biggest crude consumer. Brent crude futures was up by 2 cents to $94.12 a barrel by 0324 GMT, while US West Texas Intermediate crude rose 18 cents, or 0.2 per cent, to $88.66. “The oil price has been pricing in a global recession, but even with flat global growth, the oil demand would remain quite strong relative to continued supply worries,” said Clifford Bennett, chief economist at ACY Securities in a note. The market has been focusing on the demand side of late but has probably priced too big a fall in actual demand while forgetting supply can still be somewhat problematic, said Bennett. The increasing likelihood of a US rail stoppage due to an ongoing labour dispute is also adding support to the market. Three unions are negotiating for a new contract that could affect rail shipments, which are important for crude and product deliveries.