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[SINGAPORE] Oil markets dipped on Friday, pulled down by high fuel inventories and improving industry efficiency, but were still on track for a solid weekly gain.
Brent crude futures, the international benchmark for oil prices, were down 8 US cents, or 0.2 per cent, at US$48.34 per barrel at 0151 GMT, but up 3.5 per cent for the week.
US West Texas Intermediate (WTI) crude futures were at US$45.98 per barrel, down 10 US cents, or 0.2 per cent, but up around 4 per cent for the week.
Crude prices are around levels in late November last year, when a group of oil producers including Russia and Organization of the Petroleum Exporting Countries (Opec) pledged to withhold around 1.8 million barrels per day (bpd) of production between January this year and March 2018 in order to tighten the market.
Oil analysts at research and brokerage firm Sanford C Bernstein said that global oil stocks remain high.
"For the first half of 2017, OECD inventories are likely to finish higher, rather than lower... The most plausible explanation is that Opec compliance has been not as high as has been suggested," Bernstein said. "Opec will have to cut deeper and for longer if it wants to eliminate the inventory overhang and prices to rise," Bernstein said.
It added that the upside for oil prices looked limited even if Opec took more action due to high US shale production.
Goldman Sachs said that the crude oil price outlook remained weak, largely due to rising cost efficiency from US shale drillers.
"We see potential for shale to breakeven at US$45... (and) we see US$45-US$55 per barrel annual WTI range," the US investment bank said.