Oil at Multiyear Lows

Oil at Multiyear LowsOil at Multiyear Lows

Oil prices rose by $1 a barrel on Tuesday in thin trade amid prospects of colder weather in coming weeks but the outlook for 2016 remained bearish due to slowing global demand and abundant supplies from OPEC members.

Brent and WTI crude prices gained more than 2% to trade above $37 per barrel after falling 3% on Monday. Brent traded less than two dollars above an 11-year low of $35.98 hit last week, Reuters reported.

Both crude benchmarks are down by more than two-thirds since mid-2014 on US shale oil output and OPEC member Saudi Arabia's decision to pump near record volumes to safeguard market share.

ING Bank analyst Hamza Khan noted Tuesday's oil price rise came in low trading volumes and after a possible drawdown in US stocks.

Severe weather in parts of the US south and midwest has disrupted shipments. "But fundamentals remain very bearish," Khan said. In the short-term, colder weather entering Europe and North America following an unusually warm start to winter may provide a mid-term boost to prices.

On Tuesday, British wholesale gas prices snapped a months-long bearish spell with week-ahead prices jumping 13% on forecasts for colder temperatures.