Oil Stocks - Oil prices Edged Up

Oil prices edge up on reports of falling inventories, but glut remains in place

Oil prices edged up on Wednesday following reports of falling stockpiles and rising refinery activity, but analysts said the market would remain under pressure for the rest of the year and into 2016.

Industry group American Petroleum Institute (API) said on Tuesday that U.S. crude stockpiles fell last week by 482,000 barrels due partly to higher refinery runs.

This helped push front-month U.S. crude futures CLc1 up 29 cents from their last settlement to $40.96 a barrel at 0552 GMT. The gain followed an over $1 fall the previous session.

Official inventory data is due later on Wednesday from the U.S. government's Energy Information Administration (EIA). Internationally traded Brent crude futures LCOc1 were up 35 cents at $43.92 per barrel.

Despite the slight gains on Wednesday, most analysts expect prices to remain at low levels for the rest of the year and into 2016 as production continues to outpace demand.

"Oil market sentiment has turned back to 'max bearish' mode. Talk of $20 oil is back," consultancy Energy Aspects said in a note this week.

At the core of the bearish sentiment is that every day between 0.7-2.5 million barrels of oil per day are being produced in excess of demand, leading to a glut that is testing the logistics of oil markets.

Onshore inventories across the world are on the brink of being full, a condition known as tank-top, while offshore tanker storage requires prices on the far end of the curve to be higher than prompt deliveries in order to warrant storage.