NEW YORK: Crude oil cost raised more than $1 a barrel on Friday, continuing a rebound from near-six-year lows plumbed last week, although no rapid recovery is expected amid rising global inventories and steady OPEC supply.
Prices closed more than 4 percent higher on Thursday, pushed up by conflict in producer Libya and expectations of a boost to oil demand after China’s central bank easing.
Benchmark Brent crude futures were $1.30 higher at $57.86 a barrel at 0611 GMT, after closing up $2.41 on Thursday.
U.S. crude for March delivery was up $1.28 at $51.78 a barrel. The contract had finished up $2.03 the previous day.
“There are signs of rejuvenation in short-term physical demand,” National Australia Bank analyst Vyanne Lai said in a note.
Physical demand has been boosted recently by traders storing crude on tankers to benefit from higher prices for delivery in future months – a market structure known as contango – and stockpiling by major importing countries such as China and India.
Still, this is “not sufficient to make a meaningful dent to the supply overhang,” Lai said.
Growing numbers of OPEC delegates say they expect no rapid recovery in oil prices, even though the market is showing tentative signs of a rally from near-six-year lows.
Late on Thursday top OPEC producer Saudi Arabia cut its monthly oil prices for Asian buyers to the lowest level in at least 12 years.
The move is viewed as an attempt to maintain market share in its key market by offering competitive prices and forcing higher-cost producers to curb supply. Oil prices fell by one-third to below $50 a barrel following a decision by OPEC in November not to cut output despite a global glut.
U.S. non-farm payrolls data due later on Friday will provide clues on economic growth in the world’s biggest oil consumer.
On Thursday, encouraging jobless claims data in the United States boosted sentiment in oil and equity markets.
