London: Oil prices rebounded Friday on bargain-hunting at the end of a volatile trading week, having slumped the previous day as surging US crude reserves added to the global supply glut.
European benchmark Brent North Sea crude for April delivery rallied $1.14 to $61.19 a barrel in London midday deals.
New Yorks West Texas Intermediate (WTI) for April added $1.02 to $49.19 a barrel.
Crude futures had dived Thursday as the market appeared to do a double-take on Wednesdays US inventories report, which showed US crude stockpiles hit a fresh record last week.
“US crude oil (prices) posted a rebound… after plunging 5.5 percent the previous day as rising US inventories countered expectations for recovering demand,” said ETX Capital analyst David Papier.
WTI sank $2.82 in New York on Thursday while Brent shed $1.58 in London, in a delayed reaction by traders to a bigger-than-expected 9.4 million barrels increase in US crude stocks in the week to February 20.
The US Department of Energy said Wednesday US crude reserves now stand at a record 434.1 million barrels.
Surging American oil reserves normally weigh on prices because the United States is the worlds biggest consumer of crude.
“The Brent price appears immune to the negative news. US crude oil stocks surged significantly once again,” noted Commerzbank analysts.
Crude oil has however lost about 50 percent of its value since June, weighted down by the global supply glut.
Later on Friday, traders will switch their focus to economic growth data in the United States, for clues on the health of oil demand.
“Investors will have plenty to look forward to today and with the second reading of US Q4 GDP data, as well as the Chicago PMI and University of Michigan sentiment index we could see further gains in crude oil on any positive surprise,” said Sucden anlayst Kash Kamal.
Earlier this week, prices won support from upbeat comments from Ali Al-Naimi, the oil minister of major oil producer Saudi Arabia.
Oil demand is growing and the market has turned “calm”, Al-Naimi said on Wednesday.
Saudi Arabia is the biggest and most influential member of the Organization of the Petroleum Exporting Countries (OPEC), which in November decided to maintain output levels despite a global oversupply.
“Prices managed to get some support amid positive comments from OPECs kingpin Saudi Arabias Al-Naimi, who said prices were stabilising and that demand was growing,” said analyst Andrey Kryuchenkov at Natural Resources Consulting.
“However, US crude stockpiles continue to push higher amid refining strikes, weather-related disruptions and still ample production.” (AFP)