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 By 0928 GMT on Thursday, U.S. crude <CLc1> was trading at about
$44.50 a barrel, up 5 cents and off a six-year low hit on Wednesday.
Brent <LCOc1> was up 26 cents at $48.73 a barrel.
On Wednesday, the U.S. Energy Information Administration (EIA) said
domestic crude oil stocks had risen by almost 9 million barrels week
on week to nearly 407 million, the highest level since the
government began keeping records in 1982.
This pushed U.S. crude futures to an intraday low of $44.08 a
barrel, the weakest level since April 2009, but Brent held up
relatively well.
"It's a tug of war between the non-supportive fundamentals and
investor flows - investors are more concerned about missing a
potential bounce," said Ole Hansen, senior commodity strategist at
Saxo Bank. "But there is nothing bullish to be found in those
numbers. The break will be to the downside."
 Analysts expect stockpiles to keep building as U.S. production has
shown no signs of slowing, and when refiners enter seasonal
turnarounds, utilisation rates will fall.
In addition, the market structure incentivises traders to buy cheap
crude to store, with the aim of selling it at a higher price for
future delivery.
"With weak pricing and contango structures across most U.S. grades,
storage plays will continue to attract material into tanks. Until
seasonal maintenance is out of the way there appears to be little
incentive to do otherwise," analysts at Energy Aspects said in a
note.
Some traders believe this buying to store has provided a "false
bottom" in the market, and that when land storage gets filled, or
floating storage economics no longer work, there will be another
sell off in futures.
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"Traders buying and putting oil into storage may be holding the
price for now," said Christopher Bellew, a broker at Jefferies Bache
in London. "I see the market as being in a consolidating phase ...
(but) at some point I expect a move to the downside."
He suggested Brent could test $40 or go lower. "My principal reason
for being so bearish is the production war within OPEC as Saudi and
Iraq both seek to maximise sales and U.S. production has not yet
started to slow."
Saudi Arabia has said it is unwilling to balance the market alone
and will maintain output in hopes low prices will drive higher-cost
producers to cut their output.
(Additional reporting by Henning Gloystein in Singapore)
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