Oil rises, but set for record run of monthly falls

[LONDON] Oil rose above US$49 a barrel on Friday, supported by renewed violence in Iraq but with a persistent global supply glut keeping the market on course for a seventh straight month of declines, its longest bear run on record.

Benchmark Brent crude prices have kept within a band of US$45-US$50 a barrel since hitting a six-year low on Jan 13, but analysts have not ruled out further declines as global inventories continue to rise.

Data this week showed US crude oil inventories had reached their highest levels since the 1930s.

Brent oil futures were up 37 cents at US$49.50 per barrel at 1106 GMT, while benchmark US WTI futures were up 42 cents at US$44.95 a barrel.

Brent is on track to post a 14 per cent fall for January, marking a seventh month of decline and the longest-running monthly drop since Reuters records started in 1988.

A Reuters survey of analysts showed on Friday that oil will likely continue falling before posting only a mild recovery in the second half of this year, with prices set to average even less in 2015 than during the global financial crisis.

The survey of 33 economists and analysts forecast North Sea Brent crude would average US$58.30 a barrel in 2015, down US$15.70 from last month's poll, in the biggest month-on-month revision since prices last collapsed in 2008-2009.

"The fundamentals remain weak, with seasonal refining maintenance resulting in stock builds on what is an already high base for stocks," said Amrita Sen, chief oil analyst at London-based Energy Aspects.

The International Energy Agency this month said a price rebound could take some time despite increasing signs of the downturn easing, with lower output from North America shale production and higher demand due to the low prices.

The market found support in news of renewed violence in key oil producer Iraq, where Islamic State militants struck at Kurdish forces southwest of the oil-rich city of Kirkuk.

REUTERS