LONDON: Oil prices nudged higher on Friday, further recovering from a steep dive seen mid-week, although demand is set to remain shackled by a global supply glut, analysts said.
US benchmark West Texas Intermediate for delivery in May edged up one cent to $50.80 a barrel.
Brent North Sea crude for May gained 27 cents to $56.84 around midday in London.
WTI and Brent sank 3.6 percent on Wednesday after the US Department of Energy said commercial inventories in the world’s biggest economy hit a record high last week.
That came after Saudi Arabia’s Oil Minister Ali al-Naimi said his country’s production had hit an all-time high of 10.3 million barrels a day in March.
Phil Flynn, an analyst at Price Futures Group, has said this week that rising imports of US crude oil could indicate improved demand prospects in the world’s largest oil consumer or concerns about supply tightening.
Price support has meanwhile come from events concerning major oil producer Iran.
Analysts attributed steep gains at the start of the week to investors concluding that the nuclear framework agreed between Iran and international powers will have a minimal near-term effect on global crude supplies.
The deal Tehran agreed with the United States, Britain, China, France and Russia plus Germany paves the way for the Islamic republic to curtail its nuclear activity in exchange for relief from punishing economic sanctions, including on oil investment.
The United States on Thursday warned that sanctions on Iran will be lifted in stages as a nuclear deal is implemented, after Tehran demanded they be removed as soon as it comes into force.
“Geopolitical factors remain a constant worry for investors with concerns regarding Iran’s nuclear programme potentially leading to ongoing volatility in the crude oil market,” said Kash Kamal, senior research analyst at Sucden brokerage.