By Meeyoung Cho
SEOUL (Reuters) - Oil futures gave up early gains to trade near three-month lows on Friday on a persistent supply glut that has cut prices by up to 13 percent since the start of November.
U.S. crude West Texas Intermediate (WTI) dipped 11 cents to $40.43 a barrel as of 0731 GMT, after edging up in earlier trades. It ended down 21 cents at $40.54 on Thursday, after dipping to $39.89 during the previous session, its lowest since Aug. 27.
Front-month Brent futures for January lost 6 cents to $44.12 a barrel, after finishing up just 4 cents on Thursday at $44.18.
"Oil markets are really moving range bound ... mainly because fundamentals have yet to change," said Daniel Ang, an investment analyst at Phillip Futures Pte Ltd. "Markets are a bit fearful that Iranian oil could come in."
Ang separately said in a report on Friday that prices are "forming a descending triangle pattern which suggests possible drops in prices in the near term."
Also Read
Crude futures have already lost around 60 percent of their value since mid-2014 as supply exceeds demand by roughly 0.7 million to 2.5 million barrels per day to create a glut that analysts say will last well into 2016.
Market data suggests that oil traders are preparing for another downturn in prices by March 2016, as what is expected to be an unusually warm winter dents demand just as Iran's resurgent crude exports hit global markets after sanctions are ended.
"Uncertainty is so high in the world's crude markets, which are in rebalancing procedures. Prices will have high volatility in 2016 and particularly in the first half there is a high risk of falling prices," Kang Yoo-jin, commodities analyst at NH Investment and Securities based in Seoul, said in a report.
Kang said a stronger U.S. currency if U.S. interest rates are hiked in coming months could weaken demand for dollar-denominated crude oil futures as the contracts will be considered expensive to other currency holders.
ANZ bank said on Friday: "The weakness in the front end of the curve has pushed the market to deep contango again."
The bank noted the spread between near-month futures and December 2016 contract prices has hit a new record of nearly $8 a barrel.
(Reporting by Meeyoung Cho; Editing by Michael Perry and Tom Hogue)