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 Oil saw steep falls earlier this week as a resurgent dollar weighed
on the market amid concerns U.S. crude supplies may have started
rising again after three weeks of draws.
North Sea Brent crude has shed more than 3 percent this week, its
second straight weekly loss, while U.S. crude is set to end a record
weekly winning streak with a loss of more than 2 percent.
July Brent <LCOc1> was up 90 cents at $63.48 a barrel by 1140 GMT.
U.S. crude <CLc1>, also known as West Texas Intermediate or WTI,
reached an intra-day high of $58.72 a barrel, up $1.04, before
easing back to trade around $58.60.
U.S. inventory data and wildfires in Canada, which knocked out 10
percent of its oil sands output, also supported prices.
Data from the U.S. Energy Information Administration (EIA) on
Thursday showed crude oil inventories <USOILC=ECI> fell by 2.8
million barrels last week, down for the fourth week ahead of
Monday's Memorial Day holiday, which unofficially kicked off the
peak summer driving season in the United States.
The fall in U.S. crude stocks in the EIA data was more than the
857,000-barrel draw forecast in a Reuters survey and in contrast
with a build of 1.3 million barrels estimated by the American
Petroleum Institute.
"The global supply imbalance is set to persist into the second half
of 2015, but pressure to store in the U.S. is likely to taper off
over the summer," Barclays analysts said in a note.
Oversupply in oil markets outside the United States gives little
room for a rise in spot prices, analysts say.
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The Organization of the Petroleum Exporting Countries (OPEC) meets
next week to agree policy for the next six months and is widely
expected to maintain a collective production target of 30 million
barrels per day (bpd).
The cartel's output is more than 1 million bpd above this level and
demand for its oil is much lower - leaving a huge supply surplus,
estimated by some analysts at more than 2 million bpd. [OPEC/O]
"That should keep a lid on prices," said Carsten Fritsch, senior oil
and commodities analyst at Commerzbank in Frankfurt.
Analysts at French bank Societe Generale agreed, seeing "no chance"
of a change in OPEC production policy next week.
(Additional reporting by Henning Gloystein; editing by Dale Hudson
and Jason Neely)
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