OIL: Decline in crude prices steady in early trade

The sharp declines in oil prices seen in previous days related to the Greek crisis, US production and dollar strength, seem to have eased in early trades on Thursday, with the main crude benchmarks rising for the first time in months.

Following a 50-65c fall on Wednesday, US-marker crude WTI was down a mere 2c at $56.94 a barrel, with analysts saying it has been testing support on the lower range of $57-62, where it has been trading since early May.
“If this downside pressure continues, the commodity may return to the low $50s,” said Jameel Ahmad, Chief Market Analyst at forex trader FXTM.
“Investor sentiment is continually plagued by oversupply concerns, and this is going to remain a dominant theme when it comes to discussing the oil markets for at least the remainder of the current year,” he said.
“Oversupply concerns intensified again on Wednesday, when the previous comments from the Energy Information Administration (EIA) that US inventories are still rising, were validated by a surprise increase in inventories for the first time in nine weeks.”
Other analysts expect the $57-62 support level to hold, arguing that this week's bearish factors had already been priced into the market.
Brent was up 13c at $62.14 a barrel, but remains on a downward trend since early May having fallen more than 8%.
US data showed inventories rose by 2.4 mln barrels last week, marking the first weekly stock build since April on the back of strong US production, supported by increased output from the Gulf of Mexico.
OPEC supply rose to a three-year high of 31.60 mln bpd in June, up from 31.30 mln bpd in May as the oil cartel insists on maintaining high output levels to keep prices strained and push competitors out of the market.