Oil extends gains in Asian trade

11:01 AM | 6 Feb, 2015
Oil extends gains in Asian trade
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SINGAPORE (APP) - Oil prices extended gains in Asia Friday as volatile trading continued unabated with dealers divided on whether the beaten-down commodity has bottomed out, analysts said.

US benchmark West Texas Intermediate for March delivery rose 69 cents to $51.17 while Brent crude for March gained 54 cents to $57.11 in late-morning trade.

WTI on Thursday jumped $2.73 in New York and Brent advanced $2.41, erasing losses earlier in Asia.

"Oil's continuing whipsaw has largely been motivated by news surrounding inventory and supply side umbers," said Nicholas Teo, market analyst at CMC Markets in Singapore.

"The battle between oil bulls and bears will likely continue tonight when the US weekly drilling rig count numbers are released," Teo added.

Last week's data showed a record drop of 94 oil rigs to 1,223 for the week ended January 30.That compared with 2,393 a year ago.

The drop, coupled with announcements of deep cuts in capital spending by major oil companies including BP and BG Group, has suggested there will be tighter supplies in the future. Teo said "there are indications that the rig count will be lower" for the week to Friday.

Some analysts however remain doubtful about the impact of immediate-term dips in production levels as supplies continue to outweigh global demand. Prices plunged around 60 percent from their June peaks to a six-year low last week, largely owing to a surge in global reserves boosted by robust US shale production.