02 July 2015, News Wires – Oil prices steadied on Thursday after the main crude benchmarks tumbled 2.5%-4% a day earlier as US stockpiles rose for the first time in months on the back of high production.
Following a 4.2% drop on Wednesday, front-month US crude futures were trading at $56.94 per barrel early on Thursday, down 2 cents from their last settlement.
Heading into the second half of the year, US crude has been testing support on the lower range of a $57-$62 per barrel price channel, where it has been trading since early May.
“We … expect this support level to hold,” Singapore-based Phillip Futures said, arguing that this week’s bearish factors had already been priced into the market.
Brent crude futures were trading at $62.14 per barrel, up 13 cents after dropping 2.5% in the previous session. The contract remains on a downwards trend that has been in place since early May and which has seen prices fall more than 8%.
The tumble in US crude came after government data showed inventories rose by 2.4 million barrels last week, marking the first weekly build since April.
The stock build came on the back of strong US production.
“Overall, production was supported by increased output from the Gulf of Mexico,” Barclays said following the publication of the data.
The higher US output added to an ongoing glut in global production.
Outside the United States, supply from the Opec rose to a three-year high of 31.60 million barrels per day in June, up from 31.30 million bpd in May.