Oil prices hovered near $50 a barrel today after US government data showed a ninth straight weekly increase in crude inventories and a build-up in gasoline stocks ahead of summer.
US crude oil futures edged up 15 cents to $50.37 a barrel, after sliding $1.64 in New York yesterday.
Prices hit a low of $50.06, the weakest since February 22nd. Brent crude oil for May, which expires later today, rose 37 cents to $50.85 a barrel, after losing more than $1 to end at a six-week low yesterday.
Oil prices have fallen almost 14 per cent from last week's record high above $58 a barrel on news that global supply would rise while demand could ease.
Saudi Arabia told Asian refiners and majors this week it would boost daily supplies by half a million barrels in May, sources said, as the International Energy Agency forecast that China's oil demand growth was slowing from last year's fast pace.
US crude oil inventories, already at the highest level in nearly three years, rose another 3.6 million barrels to 320.7 million last week, the US government's Energy Information Administration said.
Gasoline stocks climbed by 800,000 barrels to 213.1 million, ending a five-week slide that has raised anxiety over supplies ahead of summer when Americans take to the roads. Despite recent losses, prices are still up 16 per cent from the start of the year, with speculative players still seen keen on energy markets.
Middle East Gulf producers are eager to raise output to encourage stock-building in the coming months, creating a buffer for strong demand later this year, but OPEC members Nigeria, Algeria and Venezuela have said more oil was unwarranted.
With oil prices now almost $5 below the cartel's $55-a-barrel threshold for triggering a second increase in production, opposition to the Gulf moves could intensify.
The Organization of the Petroleum Exporting Countries raised output limits by 500,000 barrels per day (bpd) in March to 27.5 million bpd, leaving room for a second rise if oil prices remained high.