Brent crude was still within sight of its 2015 high reached on
Thursday and has rallied 16 percent in April, supported by conflict
in Yemen and the prospect that lower prices are starting to curb
U.S. shale output.
At 1104 GMT (7.04 a.m. EDT), Brent crude for June <LCOc1> was down
30 cents at $63.68 a barrel. Brent reached a 2015 high of $64.95 on
Thursday. U.S. crude for May <CLc1> was down 40 cents at $56.31 a
barrel.
Pressuring prices on Thursday, the Organization of the Petroleum
Exporting Countries (OPEC) said in its monthly report that its March
production jumped 810,000 barrels per day (bpd) to 30.79 million
bpd, led by Saudi Arabia.
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A day earlier, the International Energy Agency, which advises
industrialized countries, also reported a surge in OPEC production
to 31 million bpd, which it said could delay a tightening in the
global market.
"There is the prospect in the second quarter of an enormous 2.4 to
2.7 million bpd stockbuild if OPEC production continues at 31
million bpd," said David Hufton of brokers PVM.
"Could it be that Saudi Arabia wants to frighten non-OPEC producers
such as Russia to the production negotiation table?"
Talks between OPEC and other major producers triggered speculation
about deals to cut production and supported oil prices on Wednesday,
though most analysts said an agreement was unlikely.
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Oil prices have almost halved since June 2014 on ample supplies. The
drop deepened after OPEC refused in November to cut its production
and instead chose to defend market share against higher-cost
producers such as the United States.
Conflict in Yemen supported prices on Thursday. A tribal group made
up of former Al Qaeda militants took control of a major southern oil
terminal in the country.
While Yemen is not a major oil producer, the conflict raises concern
about risks to supply from major exporters in the region such as its
neighbor Saudi Arabia.
Crude also got a lift from signs this week the price drop is
starting to slow U.S. production and from a smaller-than-expected
rise in U.S. crude inventories that raised hopes months of rising
stocks may be nearing an end.
(Additional reporting by Himanshu Ojha in London and Henning
Gloystein in Singapore; Editing by William Hardy)
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