Oil prices slightly higher stabilizing after sharp drop

PanARMENIAN.Net - Oil prices were slightly higher Thursday, April 4 stabilizing after a sharp drop the day before sparked by rising U.S. crude supplies, The Associated Press reported.

Benchmark oil for May delivery was up 2 cents to $94.47 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped $2.74, or 2.8 percent, to close at $94.45 on Wednesday. The last time oil fell by that much in a day was on Nov. 20.

Oil plunged after the U.S. Energy Department said crude oil supplies grew by 2.7 million barrels to 388.6 million barrels in the week ended March 29. The U.S. supply of oil is now 7.2 percent above year-earlier levels and the highest since July 27, 1990, when it was at 391.9 million barrels.

"We did see a move lower yesterday to extreme areas," said Carl Larry of Oil Outlooks and Opinions. "So far today we are seeing some of the correction we expected."

Oil production in the U.S. is about 7.1 million barrels a day, up 22 percent from a year earlier and the highest in two decades. Output has jumped as oil companies use techniques such as horizontal drilling and hydraulic fracturing, or fracking, to unlock crude oil trapped in shale rock formations in the U.S.

Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 36 cents to $107.47 per barrel on the ICE Futures exchange in London.