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Oil prices edged up on Friday, pushed by a tighter US fuel market and as technical indicators attracted buying from financial players, but doubts over the feasibility of a planned production cut still weighed on markets.
Following a dip in early trading, international Brent crude futures were trading at $52.18 per barrel at 0643 GMT, up 15 cents, or 0.29 per cent from their previous close.
After falling below $50 a barrel on Thursday, US West Texas Intermediate (WTI) crude was trading at $50.78 per barrel, up 34 cents or 0.67 per cent from its last close.
Traders said the US price rise was due to a tightening fuel market.
“Oil prices rose overnight despite rising stockpiles in the US, as fuel supplies in the US fell to the lowest level this year,” ANZ bank said in a morning note on Friday.
EIA data
The US Energy Information Administration had reported a drop of 3.7 million barrels for distillates late on Thursday, which include diesel and heating oil, and a 1.9-million barrel decline for gasoline.
However, US crude stocks rose for the first time in six weeks, swelling by 4.9 million barrels in the week to October 7 to 474 million barrels.
Outside the United States, traders said that Brent prices were being supported by technical indicators, which had attracted investment from financial market participants.
Reuters' technical analyst Wang Tao said Brent could test resistance at $52.49 per barrel, a break above which could lead to a gain to $53.45.
OPEC output cut
The price rises came despite rising doubts that a planned oil output cut by the Organization of Petroleum Exporting Countries (OPEC) and potentially non-OPEC member Russia would be sufficient to rein in a global production overhang standing at around half a million barrels per day (bpd) in excess of consumption.
“Oil prices continue to trend up despite our doubts around OPEC's dubious return to the quota system,” US bank Jefferies said on Friday.
“Talk of cutting output in some quarters appears to be morphing into talks of a freeze in supply. We are doubtful that OPEC's efforts, even if successful in achieving a targeted 32.5 million bpd in collective output, will prove sufficient to materially alter the global oil balance and deliver a substantial reduction in oil inventories,” French bank BNP Paribas said in a note to clients.
OPEC's crude oil production stood at a record 33.6 million bpd in September.
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