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The
International Energy Agency said there was a record 3 billion
barrels in tanks worldwide.
"The underlying sentiment is bearish," said PVM analyst Tamas
Varga. "I don't see anything that could support prices rising in
the long term."
Brent crude was trading 70 cents higher at $44.76 per barrel at
0528 ET. It was on track for a more than 5 percent weekly loss.
U.S. crude was 15 cents higher at $41.90 a barrel. The benchmark
closed down on Thursday almost 3 percent on a 4.2 million-barrel
rise in U.S. crude inventories.
The IEA, in its Monthly Oil Market Report, said that ballooning
global stockpiles of crude and oil products could worsen the
overhang into next year.
"...The current forecast is for a mild winter in Europe and the
U.S. If it turns out to be true, bulging stock levels will add
further pressure and oil market bears may choose not to
hibernate," the IEA said.
Oil was caught up in a commodities market drop on Thursday, with
base metals also hit hard.
Crude markets have been dogged by oversupply, estimated between
0.7-2.5 million bpd being produced above demand, which has
resulted in prices falling by almost two-thirds since June 2014.
The glut is a result of high production by most major producers,
including OPEC, Russia and North America.
On the demand side, an economic slowdown in Asia, led by the
region's two biggest economies China and Japan, has led to
concerns about slowing consumption, though it has so far held
up.
There were also signs that traders expect more price falls, with
the number of options taken to sell crude if prices fall to $40
or even $25 per barrel soaring.
(Additional reporting by Henning Gloystein in Singapore, editing
by William Hardy)
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