Brent crude up by 17% to cost over $35

PanARMENIAN.Net - Brent crude futures edged up on Monday, February 29 after already making up ground last week as indications mounted of the market bottoming out, but analysts warned that downward risk remained and that it would take some time to work down a huge global glut, Reuters reports.

Brent futures LCOc1 were trading at $35.24 per barrel at 0807 GMT, up 14 cents from their previous close. Since Feb. 11, the last time Brent was below $30, the crude benchmark has risen some 17 percent.

U.S. crude futures CLc1 were weaker, weighed down by record American crude inventories, dipping 7 cents to $32.70 a barrel, after gaining around 27 percent since Feb. 11.

"There is still a lot of downside risk ... But the U.S. crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels," said Richard Gorry, director of JBC Energy Asia.

"The latest data on U.S. production is also supportive as it indicates that the low prices are finally having an impact," he said, according to Reuters.

U.S. producers cut the number of rigs drilling for oil for a 10th straight week to the lowest since December 2009, data showed on Friday, which analysts expect will lead to an output fall of 600,000 barrels per day (bpd) this year.

"The total oil rig count is now falling below that required to sustain oil production and as a result production levels are beginning to fall," brokerage Banchero Costa said, adding that U.S. 2016 oil production would fall 5 percent from the previous year to 8.7 million bpd.