London: Benchmark oil contract Brent North Sea crude struck an 11-year low this week before pulling back ahead of the festive break, as the high supply situation dominated trading.
Brent on Monday slumped to $36.04 a barrel -- the lowest level since July 2004.
It pulled back to stand at $37.56 on Thursday, a gain of 20 cents on Wednesday's close, as official data showed an unexpected fall in US commercial crude stockpiles.
"US crude oil inventories posted a surprise drop last week, bucking the seasonal trend of rising stockpiles and offering some lift to... prices," said Kash Kamal, senior research analyst at Sucden Financial.
However, analysts pointed out that the US report also included some aspects that were less favourable towards addressing an oil supply glut that has sent prices diving more than 60 percent from above $100 since mid-2014.
Domestic production of oil rose slightly and inventories at a closely watched trading hub in Cushing, Oklahoma, increased.
The OPEC oil cartel sees only a gradual improvement in the global crude market, with prices recovering to above $70 after four years, according to a report released Wednesday.
The Organization of the Petroleum Exporting Countries, in its annual World Oil Outlook report, bases its reference scenario on $70.70 for a barrel of crude in 2020 and $95 in 2040.
The oil market has been rife with drama over the past year after OPEC abandoned its policy of cutting production to support prices to maintain market share amid competition from North American shale producers.
Led by Saudi Arabia, the cartel instead aims to push out growing competition also from major non-OPEC producers such as Russia.
"OPEC's wily plan to keep supplying the market with oil, drive prices to a level that will bankrupt the competition, which will in turn reduce output and lead to price recovery is taking a little longer than first imagined," said Jasper Lawler, analyst at CMC Markets.
The main global oil contracts did however rallied on Wednesday after the US Department of Energy reported also that oil imports sank in the United States, the world's biggest consumer of crude.
The news stoked hopes that a plunge in prices may be coming to an end.
On Thursday, US benchmark West Texas Intermediate was up 23 cents at $37.73 a barrel.
WTI this week broke past Brent for the first time since January, after US lawmakers last week lifted a 40-year ban on crude exports, leading to hopes of a fall in supplies.
AFP
