SINGAPORE: US crude oil prices edged up in early Asian trading on Thursday, supported by a fall in crude inventories after 10 straight weeks of builds, but oversupply and cheap oil are still dominating the broader market.
Crude inventories fell 3.6 million barrels in the week to Dec. 4, compared with analysts' expectations for an increase of 252,000 barrels, U.S. Energy Information Administration (EIA) data showed.
This, along with signs of dipping U.S. production, lent prices some support.
U.S. crude futures were at $37.40 per barrel at 0018 GMT, up 24 cents from their last settlement, although still not far off this week's seven-year lows below $37 per barrel. Prices are down over 11 percent since the beginning of December.
"Energy markets still remain vulnerable to further weakness, with the focus firmly on OPEC," ANZ bank said on Thursday.
The Organization of the Petroleum Exporting Countries last week decided not to cut production in defence of prices. It also ditched even formal output quotas as member states compete for market share amongst each other and with outside competitors like Russia and North American shale drillers.
Between 0.5 and 2 million barrels of crude oil are being produced in excess of demand every day, creating a glut that has pulled down prices by almost two-thirds since 2014 and which is threatening a situation known as "tank-top", in which the market runs out of available storage facilities.
"Oil markets are likely to run out of onshore crude storage in 1Q16," PIRA Energy said this week.
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