Oil prices gathers strength on Friday, March 10 after dropping to their lowest in more than three months, pressured by heavy oversupply despite OPEC-led production cuts.
Brent crude oil was up 35 cents at $52.54 a barrel by 0950 GMT, after falling 1.7 percent on Thursday and 5 percent the day before in its biggest percentage decline in a year.
U.S. crude was up 40 cents at $49.68 a barrel. It fell below $50 on Thursday for the first time since December. U.S. crude is on track for a drop of more than 7 percent this week, its biggest weekly fall for five months.
Market confidence failed after news of another big rise in U.S. crude inventories that have built steadily as U.S. oil production rose this year.
The Organization of the Petroleum Exporting Countries and other exporters including Russia agreed late last year to cut output by around 1.8 million barrels per day (bpd) in the first half of this year, but so far the move has had little impact on inventory levels.
“Steep price falls in the last two days amid building U.S. inventories show that the market remains concerned about the supply-demand balance,” NAB Group Economist Phin Ziebell said.
Crude oil inventories in the United States, the world’s top oil consumer, swelled by 8.2 million barrels last week to a record 528.4 million barrels. [EIA/S]
U.S. oil and gas drilling has also picked up, with producers planning to expand crude production in North Dakota, Oklahoma and other shale regions, while output has jumped in the Permian, America’s largest oilfield, Reuters reports.