Oil steady above $50 as investors take stock after slide
Brent crude oil recovered slightly after falling below $50 (33 pounds) a barrel on Wednesday for the first time since May 2009, as traders took stock after a sharp slide since the start of the year.
A growing supply glut and weak global demand have pushed crude down by more than half from a peak above $115 in June last year, with prices down by more than 10 percent so far in 2015.
Benchmark Brent crude futures LCOc1 rose 10 cents to $51.20 by 1314 GMT, having fallen as low as $49.66, a level last seen in May 2009.
"I wouldn't be surprised if we trundle around the $50 mark for a few sessions as investors consolidate their positions just as they did when prices hit $60," Sucden analyst Kash Kamal said.
Brent fell in the previous four sessions as stockpiles of oil mount with no signs of a cut in production from OPEC.
U.S. crude futures CLc1 were up 57 cents to $48.50 a barrel, having fallen to $46.83, their lowest since April 2009.
The slide in oil prices has increased fears of deflation, which has further clouded the demand outlook following a series of weak economic data.
In the euro zone consumer prices fell more than expected, and turned negative in December for the first time since October 2009, a first estimate by the European statistics office showed.
Nobuyuki Nakahara, a former oil executive and ex-member of the Bank of Japan's policy board, said that he expected further price falls.
"Oil prices are likely to keep falling due to slower Chinese growth and because the years of prices above $100 before the recent plunge were 'abnormal' historically," he said.
Investors will watch U.S. oil inventory data to be released by the Energy Information Administration at 1530 GMT for more guidance on the size of the supply glut in the United States.
U.S. commercial crude oil and products stockpiles were forecast to have risen 900,000 barrels on average last week. [EIA/S]
"There's a surplus in (global) production of 1-1.5 million barrels per day in 2015 and there's absolutely no sign OPEC will intervene to cut production at a time of lower demand," said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.