US benchmark West Texas Intermediate (WTI) advanced 47 cents to $50.89 a barrel and Brent added 51 cents to $56.06 in late-morning trade.
Shailaja Nair, associate editorial director at energy information provider Platts, said Thursday’s price rebound was “due to bargain-hunting” traders, who pounced on oil at depressed prices.
Analysts however expect prices to remain under pressure owing to a global oversupply.
On Wednesday, WTI sank $3.56 while Brent dropped $3.55 after the US Department of Energy’s weekly commercial inventories report showed an increase of nearly 11 million barrels of crude to a fresh record high of 482.4 million barrels.
Also hitting prices was the announcement by Saudi Oil Minister Ali al-Naimi that Saudi production hit an record high 10.3 million barrels a day in March, despite the global crude glut and sagging prices.
That was up 450,000 barrels per day from February and topped the previous peak in 1980, while Naimi said he expected the kingdom’s production to continue at around 10 million barrels a day.
The latest developments “brought bearish signals to the market”, said Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services firm EY.
“Benchmark prices … may continue to head on a downward path in the short term.” – AFP