LONDON: Crude oil futures eased on Friday, trimming some of the week's gains, as ballooning stocks and an uncertain production outlook stalled the market's recent rise.
Brent futures fell 9 cents to $36.98 a barrel as of 0939 GMT, after settling 14 cents higher in the previous session. The crude benchmark is set to end the week with a gain of more than 5 percent.
US crude futures slipped 2 cents to $34.55 a barrel, having settled down 9 cents in the previous session.
While US crude output fell for a sixth straight week to 9.08 million barrels a day, inventories rose to a new record of 517.98 million barrels last week, according to the US government's Energy Information Administration.
Cuts in US production are providing price support, but investors are also waiting for US economic data later on Friday to give further direction.
"A lot of traders are keeping their powder dry in front of non-farm payroll data - it's the No.1 (indicator) in terms of crude consumers," said Ben Le Brun, market analyst at Sydney's OptionsXpress.
"Investors are a little more confident we've seen a bottom in oil (prices)," he added. Le Brun is forecasting oil prices will hover around $40 by the middle of this year.
Positive numbers for February payrolls and US jobs data, both due at 1330 GMT on Friday, could give impetus for a further recovery in oil prices, analysts said.
"If we get a decent number this should also improve the demand outlook for the United States, still the largest oil consumer in the world," Commerzbank analyst Carsten Fritsch said.
Rising oil prices this week are helping steer Asian shares towards their strongest week in five months, as global investors returned to riskier assets after a string of positive US economic data.
Further cuts in US output are possible in the coming months.
"The tight credit market will make it difficult for US shale producers to refinance upcoming debt and we may see an accelerated decline in US oil production in 2016-17," ANZ said in a note.
The decline in US production will fuel a 1.5-percent drop in oil supply by non-members of producer group OPEC this year, Paul Bloxham, chief Australia economist at HSBC, said.
Meetings between oil producers are expected to take place in March to discuss potential coordinated action although no decision on the date or venue of a possible meeting between OPEC and non-OPEC producers has been made yet.
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