SINGAPORE: 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 90 cents to $51.38 while Brent crude for March gained 84 cents to $57.41 in afternoon trade.
WTI on Thursday jumped $2.73 in New York and Brent advanced $2.41, erasing losses during Asian trade.
“Oil’s continuing whipsaw has largely been motivated by news surrounding inventory and supply side numbers,” 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 short-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.
The problem was exacerbated in November after the OPEC cartel insisted that it would maintain output levels despite plunging prices. The 12-nation group pumps about 30 percent of global crude.