Oil bounces off November lows, but bloated U.S. stockpiles pressure market | Reuters

By Henning Gloystein
| SINGAPORE

SINGAPORE Oil prices on Thursday recovered from losses chalked up the session before, but the market remains under pressure as bloated U.S. crude inventories and rising output dampen OPEC-led efforts to curb global production.Prices for front-month Brent crude futures LCOc1, the international benchmark for oil, were at $50.95 per barrel at 0033 GMT, up 31 cents from their last close. That came after Brent briefly dipped below $50 a barrel the previous session for the first time since November. [nL3N1GZ1KO]In the United States, West Texas Intermediate (WTI) crude futures CLc1 were up 33 cents at $48.38 a barrel, after testing support at $47 a barrel overnight.

Despite the bounce on Thursday, traders said that prices remained under pressure, largely due to a bloated U.S. market and doubts that an effort led by the Organisation of the Petroleum Exporting Countries (OPEC) to cut output were having the desired effect of reining in a global fuel supply overhang. [nL3N1GU1GS]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.

The Energy Information Administration (EIA) said U.S. inventories climbed almost 5 million barrels to a record 533.1 million last week, far outpacing forecasts of a 2.8 million-barrel build. [nL2N1GZ0R4]The high inventories come as U.S. oil production C-OUT-T-EIA has risen over 8 percent since mid-2016 to more than 9.13 million barrels per day (bpd) to levels comparable in late 2014, when the oil market slump started. (Reporting by Henning Gloystein; Editing by Joseph Radford)

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Published Date: Mar 23, 2017 06:45 am | Updated Date: Mar 23, 2017 06:45 am



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