LONDON: Oil prices turned positive on Monday, erasing early losses after the Secretary-General of the OPEC producer group said he expected the market to bottom out around current levels.
March Brent crude was trading at $49.13 per barrel by 1317 GMT, up 34 cents, bouncing from an early low of $47.57.
"Now the prices are around $45-$55 and I think maybe they reached the bottom and will see some rebound very soon," Abdullah al-Badri, Secretary-General of the Organization of the Petroleum Exporting Countries said in an interview.
West Texas Intermediate (WTI) crude for March delivery was at $45.94 a barrel, up 35 cents. Front-month WTI had touched an intraday low of $44.35, just above the $44.20 hit on Jan. 13, which was its lowest level since April 2009.
After a smooth transition in Saudi Arabia following the death early on Friday of King Abdullah, both Brent and U.S. crude price fell early on Monday.
The new King, Salman, was quick to retain veteran Saudi oil minister Ali al-Naimi on Friday, in a message aimed at calming a jittery market.
Saudi Arabia, the world's top oil exporter, led OPEC in a decision to keep oil production steady at 30 million barrels per day last November. This has fuelled a global supply glut that has more than halved prices since June.
LONG POSITIONS CUT
Money managers cut their net long U.S. crude futures and options positions in the week to Jan. 20, the U.S. Commodity Futures Trading Commission said on Friday.
Oil services firm Baker Hughes published data on Friday that showed the number of U.S. oil rigs fell for a seventh straight week to 1,317, the fewest since January 2013.
Germany-based Commerzbank said that output would remain high in the short term but production from U.S. oil rigs would continue to dwindle in the coming weeks, eventually supporting prices.
"It is only a question of time before this is reflected in decreased oil production," Commerzbank analysts said in a note to clients on Monday.
"In our opinion, this indicates that prices will recover in the second half of the year."
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