LONDON — Oil prices were a touch higher on Thursday following heavy losses in the previous session as U.S. supplies continued to add to the global oil glut.
Data on Wednesday showed that U.S. crude supplies had climbed to their highest level in 80 years sending oil prices down by almost 9% for the day.
On Thursday, Brent crude LCOH5, +2.38% rose 0.4% to $54.41 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures CLH5, +1.67% traded at $48.64 a barrel, up $0.20 from Wednesday’s settlement.
Read: Here’s why the oil glut may continue
Oil futures had surged 19% within a span of four trading sessions since late last week, raising hopes among oil market bulls that prices have bottomed.
But on Wednesday U.S. weekly oil stockpiles rose more than expected, by 6.3 million barrels, and are currently at the highest level for this time of year in at least the last 80 years the U.S. Energy Information Administration said.
Analysts have noted that despite the downturn in U.S. rig activity, crude production from existing wells is currently unaffected.
Read: A rapid rebound in oil may be a bad omen
Few upward pressures on oil prices: Upcoming seasonal refinery maintenance and the resulting drop in oil demand at refineries is likely to lead to further large crude inventory increases, according to BNP Paribas.
Oil has shed more than half of its value since last summer as robust supply and tepid demand created a global oil glut.
Adding to the oversupply, Brazil and Iraq are producing almost 1 million barrels a day more oil than a year ago, JBC Energy estimates.
Brazil reached a record output of almost 2.5 million barrels a day in December last year, an annual increase of 390,000 barrels a day. Iraqi oil production, benefiting from a deal with the Kurdistan Regional Government over crude exports, rose by some 600,000 barrels a day on the year to around 3.7 million barrels a day in December, JBC estimates.
Nymex reformulated gasoline blendstock for March RBH5, +1.78% — the benchmark gasoline contract — rose 0.9% to $1.4958 a gallon, while ICE gas oil for February changed hands at $526.25 a metric ton, down $9.50 from Wednesday’s settlement.
It said the rising stockpiles will put pressure back on oil prices, which was recently supported by reports of sharp drops in the number of drilling rigs in the U.S., budget cuts by major oil companies, a U.S. oil workers’ strike and escalation of tension around oil ports in Libya.
Analysts have noted that despite the downturn in U.S. rig activity, crude production from existing wells is currently unaffected.
Read: A rapid rebound in oil may be a bad omen
Few upward pressures on oil prices: Upcoming seasonal refinery maintenance and the resulting drop in oil demand at refineries is likely to lead to further large crude inventory increases, according to BNP Paribas.
Oil has shed more than half of its value since last summer as robust supply and tepid demand created a global oil glut.
Adding to the oversupply, Brazil and Iraq are producing almost 1 million barrels a day more oil than a year ago, JBC Energy estimates.
Brazil reached a record output of almost 2.5 million barrels a day in December last year, an annual increase of 390,000 barrels a day. Iraqi oil production, benefiting from a deal with the Kurdistan Regional Government over crude exports, rose by some 600,000 barrels a day on the year to around 3.7 million barrels a day in December, JBC estimates.
Nymex reformulated gasoline blendstock for March RBH5, +1.78% — the benchmark gasoline contract — rose 0.9% to $1.4958 a gallon, while ICE gas oil for February changed hands at $526.25 a metric ton, down $9.50 from Wednesday’s settlement.
