Oil prices dipped on Thursday, weighed down by a general sentiment of globally bloated markets, though traders said that prices seemed to have found support around current levels.
U.S. West Texas Intermediate (WTI) crude oil futures were trading at $49.37 per barrel at 0420 GMT, down 25 cents, or 0.5 percent from their last close. WTI has lost around 8.5 percent in value from its April peak.
Brent crude futures, the international benchmark for oil prices, were at $51.62 per barrel, down 20 cents, or 0.4 percent. Brent is almost 9 percent below its April peak.
Traders said the falls in recent weeks were due to a realisation that global oil markets remained oversupplied, despite efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to cut output by 1.8 million barrels per day (bpd) during the first half of the year to tighten the market and prop up prices.
"It is clear that the world has plenty of oil in stock, making OPEC's life that much harder ahead of its June production cut rollover date," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.
While the United States reported a drop in its commercial crude oil stocks on Wednesday, albeit from near-record highs, its gasoline inventories surged as refiners produced more fuel than the market could consume.
Meanwhile, U.S. crude oil production continued its relentless rise, and is now up 10 percent since mid-2016 at 9.27 million bpd, at comparable levels to the peak oil glut between late 2014 and early 2016.
"U.S. crude oil production climbed for a tenth straight (week) ... to an 87-week high," said Stephen Schork of the Schork report.
Still, with an expectation that OPEC would lobby for an extension of the production cuts to cover all of 2017, analysts said there was support for prices around current levels.
Reuters technical commodities analyst Wang Tao said that "Brent oil looks neutral in a range of $51.30-$52.32 per barrel."
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