By Biman Mukherji 
 

Oil prices edged up in Asia on Wednesday, but were trading in a narrow range because supply isn't expected to fall in the near term.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $28.47 a barrel at 0322 GMT, up 53 cents in the Globex electronic session. April Brent crude on London's ICE Futures exchange rose 70 cents to $31.02 a barrel.

"There is rising U.S. crude-oil inventory and no sign of discontinuing production from the Organization of Petroleum Exporting Countries," said Peter Lee, an analyst with BMI Research. "There has been talk about possible production cuts by OPEC members, but it seems unlikely given that they want cooperation from all oil-producing countries in the world."

Oil prices found some support recently on speculation about possible production cuts, but market sentiment weakened after hopes of lower supply from major producers faded.

Mr. Lee said prices are likely to bounce around in the same range in the near term despite some support from a weaker U.S. dollar. Like most other commodities, crude oil is priced in the U.S. currency, making it cheaper for large consumers like China to buy whenever the dollar weakens.

With prices plummeting over the past two years and now hovering around $30 a barrel, a supply-side response in terms of production closures or cuts is inevitable, analysts said.

"We are expecting a slight rebound in prices in the second quarter of 2016. We expect a stronger response from supply side," said Mr. Lee, adding that higher oil-production costs in offshore and deep water would come down.

Some analysts said they expect U.S. shale production to be among the first to be affected by the current price downturn.

U.S. crude-oil production averaged an estimated 9.4 million barrels a day in 2015, and is forecast to average 8.7 million barrels a day in 2016 and 8.5 million barrels a day in 2017, according to a report by the U.S. Energy Information Administration.

Brent crude-oil prices are forecast to average $38 a barrel in 2016 and $50 a barrel in 2017, while Nymex crude-oil prices are expected to average the same as Brent for both years, the EIA said.

The fall in oil prices recently to around $30 a barrel may also have been caused by the absence of "much needed price support from Chinese traders," according to a report by Phillip Futures. Trading is thin because of the week-long Lunar New Year holiday in China from Feb. 8.

Write to Biman Mukherji at biman.mukherji@dowjones.com

(END) Dow Jones Newswires

February 09, 2016 23:38 ET (04:38 GMT)