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Oil prices edge up after sliding on U.S. stock build

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Reuters SINGAPORE
Last Updated : Jul 02 2015 | 12:57 PM IST

By Henning Gloystein

SINGAPORE (Reuters) - Oil prices edged up on Thursday, partially recovering from price falls of 2.5 to 4 percent a day earlier as U.S. stockpiles rose for the first time in months on the back of high production.

Following a 4.2-percent drop on Wednesday, front-month U.S. crude futures were trading at $57.15 per barrel at 0655 GMT, up 19 cents from their last settlement.

Heading into the second half of the year, U.S. crude has been testing support on the lower range of a $57-62 per barrel price channel, where it has been trading since early May.

"We ... expect this support level to hold," Singapore-based Phillip Futures said, arguing that this week's bearish factors had already been priced into the market.

Brent crude futures were trading at $62.33 per barrel, up 32 cents after dropping 2.5 percent in the previous session. Yet the contract remains on a downwards trend that has been in place since early May and which has seen prices fall more than 8 percent.

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The tumble in U.S. crude the previous day came after government data showed inventories rose by 2.4 million barrels last week, marking the first weekly build since April.

The stock build came on the back of strong U.S. production.

"Overall, production was supported by increased output from the Gulf of Mexico," Barclays said following the publication of the data.

The higher U.S. output added to an ongoing glut in global production.

Outside the United States, supply from the Organization of Petroleum Exporting Countries (OPEC) rose to a three-year high of 31.60 million barrels per day (bpd) in June, up from 31.30 million bpd in May.

In Russia, government data showed on Thursday that oil for exports by ship - not pipeline - rose to 2.852 million bpd in June, up from 2.512 million bpd the previous month.

(Editing by Ed Davies and Tom Hogue)

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First Published: Jul 02 2015 | 12:47 PM IST

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