US benchmark West Texas Intermediate for delivery in March was up two cents by late morning to $44.55 in volatile trading, while Brent for March eased 16 cents to $48.97.
WTI fell below $44 a barrel at one point in New York trade Thursday, a level not seen since March 2009.
The US Senate on Thursday approved a bill authorizing construction of the controversial Keystone XL oil pipeline from Canada to the United States.
After weeks of sometimes fierce debate, the bill passed with 62 votes to 36, with nine Democrats defying President Barack Obama to support a project that would transport crude from Alberta’s oil sands to refineries along the US Gulf Coast.
The House of Representatives approved its own Keystone legislation earlier this month and now must decide whether it passes the Senate measure or enters into bicameral conference to thrash out a compromise bill.
“The keystone pipeline will move US oil production more efficiently in the long term, and in the grand scale of things this will further exert downward pressure on oil prices,” said Shailaja Nair, associate editorial director at energy information provider Platts.
Oil has lost more than half its value since June last year when the commodity was sitting at more than $100 a barrel due to a global supply glut, boosted largely by robust US shale oil production.
According to the US Department of Energy, crude-oil stockpiles last week surged to the highest level in weekly data tracked since 1982. US production, meanwhile, rose to the highest level since at least 1983.
The OPEC oil cartel’s decision last November to maintain output levels despite the crude oversupply is also weighing down on prices in the face of weak demand from slowing economies worldwide. (AFP)