Oil prices make gains following dip in early trading

Oil prices edged up on Friday, pushed by a tighter US fuel market and as technical indicators attracted buying from financial players.

Following a dip in early trading, international Brent crude futures were trading at $52.08 per barrel at 1.49 GMT, up five cents from their previous close.

After falling below $50 a barrel on Thursday, US West Texas Intermediate (WTI) crude was trading at $50.63 per barrel, up 19 cents from the last close.

Traders said the US price rise was due to a tightening fuel market.

“Oil prices rose overnight despite rising stockpiles in the US, as fuel supplies in the US fell to the lowest level this year,” ANZ bank said in a morning note on Friday.

Distillates

The US Energy Information Administration reported a drop of 3.7 million barrels for distillates late on Thursday, which includes diesel and heating oil, and a 1.9-million barrel decline for petrol.

However, US crude stocks rose for the first time in six weeks, swelling by 4.9 million barrels in the week to October 7th to 474 million barrels.

Outside the US, traders said Brent prices were being supported by technical indicators, which had attracted investment from financial market participants.

"The recent breakout above key short-term resistance levels means the path of least resistance is still to the upside for oil," Fawad Razaqzada, technical analyst at futures brokerage Forex. com, said.

Reuters technical analyst Wang Tao said Brent could test resistance at $52.49 a barrel, a break above which could lead to a gain to $53.45.

Despite the slightly higher prices on Friday, there were still factors weighing on oil markets, especially doubts that a planned oil output cut by the Organisation of the Petroleum Exporting Countries (Opec) and potentially non-Opec member Russia would be sufficient to rein in a global production overhang standing at around half a million barrels per day (bpd) in excess of consumption. – (Reuters)