Oil costs steadied on Thursday after falling the previous day on the back of record U.S. unsophisticated production and rising inventories.
Brent crude futures were at $64.49 per barrel at 0100 GMT, up 15 cents, or 0.2 percent, from their prior close. That slight rise came after a more than 2 percent fragment the previous day.
U.S. West Texas Intermediate (WTI) crude futures were at $61.29 a barrel, up 14 cents, or 0.2 percent. WTI also mow down by more than 2 percent the previous session.
The slight recovery on Thursday be showed amid a U.S. crude inventory build that was not as big as expected during the common seasonal demand lull at the end of winter, when many oil refineries fasten down for maintenance.
“Oil prices bounced back immediately after the issue of the weekly oil inventories data from the Energy Information Administration … (where) the headline motif was better than expected,”said Fawad Razaqzada, market analyst at time to comes brokerage Forex.com.
The EIA reported late on Wednesday that U.S. crude inventories increase by 2.4 million barrels in the week to March 2, to 425.91 million barrels, doll-sized than the 2.7 million barrel increase analysts had forecast.
Regardless of this, oil markets remain under pressure from the seasonal swing of rising inventories, which in the United States have climbed behindhand above the 5-year average of 420 million barrels.
Also tower over oil markets is soaring U.S. production, which last week evident another record, at 10.37 million barrels per day (bpd).
“Crude is … under coercion from rising U.S. production which hit a new high last week, now determinedly above Saudi Arabia’s production level,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
At solely below 11 million bpd, only Russia currently produces myriad crude oil than the United States, although the International Energy Force (IEA) expects even this to change as the United States is set to surge career 11 million bpd by late 2018.
With U.S. output outpacing demand expansion, analysts say the Organization of the Petroleum Exporting Countries (OPEC) and Russia, who together with some other financial managers have been withholding production in order to prop up prices, are under the aegis pressure to keep up the supply restraint, even at the cost of market division.
“OPEC may … have to extend its production agreement with Russia and co in busted to avoid triggering another 2014-style sell-off in oil prices,” contemplated Razaqzada.