Oil prices bounced off from losses chalked up the session before, but the market remained under pressure as bloated U.S. crude inventories and rising output dampen OPEC-led efforts to curb global production, as Reuters reported earlier today.
Brent crude futures, the international benchmark for oil, were at $50.99 per barrel at 0621 GMT, up 0.7% from their last close. That came after Brent briefly dipped below $50 a barrel on Wednesday for the first time since November.
U.S. West Texas Intermediate (WTI) crude futures were up 37 cents, or 0.8%, at $48.41 a barrel, after testing support at $47 overnight.
Analysts said Brent had found technical support around $50 a barrel and was being pushed up as traders took new long positions after crude hit multi-month lows overnight.
Despite the bounce, traders shared the market remained under pressure, largely due to a big U.S. inventory and doubts that an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to cut output was reining in a global fuel supply overhang.
Greg McKenna, chief market strategist at futures brokerage AxiTrader, said OPEC was “underwriting the investment plans and returns of their competition in U.S. shale oil.”
McKenna said there was a risk of oil prices dropping further due to U.S. output and a lack of compliance by some producers who said they would cut production.
Oil prices could rise to $60 per barrel in the second quarter, assuming inventory draws and oil producer output cuts remain in place, Barclays said in a report on Thursday.
However, this would likely be temporary, and we forecast prices in the mid-$50s per barrel in the second half 2017,” the bank spokes-person said.