Oil cuts losses after US rig count falls

[NEW YORK] World oil prices finished modestly lower on Thursday as concerns about oversupply offset news of drop in the US rig count.

US benchmark West Texas Intermediate for May delivery dipped 33 cents to US$39.46 a barrel on the New York Mercantile Exchange.

Brent North Sea oil for May delivery slipped three cents to US$40.44 a barrel in London.

The WTI price had earlier dropped below US$39 a barrel, still pressured by Wednesday's official report that showed US crude reserves jumped a huge 9.4 million barrels last week.

But prices rebounded after the Baker Hughes rig count released Thursday showed a drop of 15 oil rigs active in the US for the week ending March 25.

The decline in rigs "gave some support to the market in spite of the terrible EIA inventory report," said Andy Lipow, a Houston petroleum industry consultant.

"The market is trying to recover, but it's going to remain weighed down with the high inventory levels and really without any concrete action out of Opec and non-Opec producers" to cut output, he said.

"That huge build in crude inventories really suggests that ... the overall supply situation remains imbalanced," said CMC Markets strategist Michael McCarthy.

"These are big numbers and the market cannot just shrug that sort of thing off."

AFP