In this Jan. 8, 2015, file photo, men work on an oil pump during a sandstorm in the desert oil fields of Sakhir, Bahrain. Oil prices were mixed Monday affected by concerns of violence in Yemen and another rise in US stocks. AP
On the supply side, US crude production has dipped slightly in three of the past four weeks, but still hovers around nine million barrels a day.
Downward pressure on prices has been limited by geopolitical risk concerns, especially the crisis in Yemen. A Saudi Arabia-led coalition launched new air strikes Monday on Iran-backed Huthi Shiite rebels.
Yemen borders the Bab el-Mandeb Strait, the key strategic entry point into the Red Sea through which some 4.7 million barrels of oil pass each day on ships headed to or from the Suez Canal.
But Barclays analysts warned that prices would find resistance to going higher.
“Sustaining the recent oil price rally requires firmer demand and a tangible supply response,” they said in a research note. “The cart is moving ahead of the horse, and we take a cautious view on further price appreciation over the near term.”
“There are several singular sources of demand strength but little evidence to suggest that a broad pickup in consumption is occurring.”