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Crude off 6-month lows but remains under pressure

Published 05/05/2017, 12:14
Updated 05/05/2017, 14:39
© Reuters.  Crude prices regain some ground but remain under downward pressure
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Investing.com - U.S. oil prices bounced off a six-month low on Friday, but the commodity remained under pressure amid sustained global supply glut concerns.

U.S. crude futures for June delivery were steady at $45.46 a barrel, off the six-month low of $43.77 hit overnight.

On the ICE Futures Exchange in London, the July Brent contract added 0.17% to $48.47 a barrel, after hitting a six-month trough of $46.65 earlier in the session.

Crude prices came under broad selling pressure after the U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 930,000 barrels in the week ended April 28, a much smaller draw than expected.

The report also showed that gasoline inventories increased by 191,000 barrels, as refiners produced more fuel than the market could consume.

Crude has been under pressure in recent weeks amid fears that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.

U.S. drillers last week added rigs for the 15th week in a row, reaching the highest level since August 2015. The relentless increase in U.S. output has overshadowed pledged output cuts by major producers.

In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.

A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.

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