US crude oil edged higher after posting a fresh 6-1/2-year low early on Friday amid concerns over global oversupply, while Brent futures slipped as the front-month September contract approached expiration. Data showing North Dakota crude oil production rose in June versus May helped pull US crude off its session high, along with the stronger dollar and weaker-than-expected consumer sentiment.
"Producers don't seem to want to blink," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut, commenting on the North Dakota data. US crude had bounced early off a fresh 2015 low and then received a brief lift from data showing US producer prices rose for a third straight month in July.
US crude futures were on pace for a seventh straight weekly loss as refinery outages and bulging inventories amplified concerns about a global supply glut. Brent was struggling to post a small gain after six weeks of losses. US September crude was up 21 cents at $42.44 a barrel at 11:55 am EDT (1555 GMT), after reaching $42.96 and having fallen to $41.35, the lowest front-month price since March 2009.
Expiring Brent September crude was down 28 cents at $48.94, having traded from $48.80 to $49.52. Brent prices remain well above the 2015 low of $45.19 from January, despite its recent slide. Brent October crude also eased. US crude has been under pressure this week because of refinery outages hitting crude oil demand. The largest of those refineries - BP's 413,500-barrels-per-day (bpd) facility in Whiting, Indiana, shut two-thirds of its capacity for repairs that could last a month or more.
Commerzbank analyst Carsten Fritsch said he did not expect an accelerated drop in prices, but rather "a slow grind lower" as long as the Whiting refinery was out of service. The US refinery problems come as the seasonal autumn refinery maintenance approaches at the end of the summer driving season. Brent felt pressure from weak economic growth data from Europe and both crude contracts have been weighed down by concerns about No 2 oil consumer China's sputtering growth. Goldman Sachs said a weaker Chinese currency was putting downward pressure on all commodity markets, signalling a turn for the worse for global economic conditions. "We believe the net commodity market effects are bearish," it said in a note to clients.