Oil prices drop amid ample supplies

Other data points to watch would be the US monthly nonfarm payroll report and the weekly USA oil rig count reported by industry group Baker Hughes, both scheduled for release later in the global day.

The discount in price of oil for immediate delivery relative to that for delivery in a year, or contango, neared its largest diff in almost two months this week, touching $7 a barrel.(Contango means that forward contractual prices are higher than today’s prices).

A senior OPEC delegate yesterday was reported saying the bloc is unlikely to waver from its no-cut policy unless oil producers outside of the bloc, such as Russian Federation, were also in sync with the plan.

“The market needs to see a few sort of conventional supply- side response”, said Michael McCarthy, a chief strategist at CMC Markets in Sydney who estimates WTI is trading in a range between US$43 and US$50 a barrel.

Demand for distillates remains strong, but the recent run up in prices was enough to incent traders to take profits following the robust inventory report. USA crude oil stocks rose by for the sixth straight week and added 28.81 MMbbls of crude oil.

U.S. stockpiles climbed by 2.8 million barrels in the week to October 30 to 482.8 million barrels slightly more than analysts expected. It fell $1.58, or 3.3 percent, to $46.32 on Wednesday.

Libya’s Petroleum Facilities Guard meanwhile halted crude shipments from Zueitina port indefinitely due to the widening conflict between the strife-torn nation’s rival governments, Bloomberg News said. DOE/EIA’s data also showed that United States production has remained steady at around 9.12-M BPD in October, the lowest level in a year.

OPEC member Iran planned to raise its crude output by 1 million barrels per day by the end of next March. Refinery throughput is now about 380,000 barrels a day higher than it was three weeks ago as refiners complete turnaround and maintenance and return to production.

Similar to diesel, gas prices are mostly down across the board – with the exception of the Midwest, which is up 4 cents to $2.268 from $2.228. Jet fuel demand is up 2.8% compared to the same four-week period past year.

Gasoline futures lost 1% to $1.3781 a gallon.

Oil has slumped more than 40% in the past year amid speculation that a global glut will be prolonged.

Oil prices recovered Thursday as investors hunted bargains following a sharp fall in the previous session.