Oil edged back above $47 a barrel today after another surge in US crude inventories prompted Opec to warn of a possible cut in supply next month.
US light sweet crude for June delivery gained 43 cents to $47.35 a barrel in Asian trade, erasing yesterday's 33-cent loss that pushed the market to settle below $47 a barrel for the first time since February 9th.
Brent crude oil gained 22 cents to $48.10 a barrel, reversing a 23-cent loss a day ago.
Although a sustained build in US commercial crude stocks to their highest level in six years has helped wipe about $11 off prices since early April, dealers said less robust oil product inventories and a refining crunch lent support to the market.
Opec warned yesterday that the cartel might start to rein in supplies above its formal output limits if global oil inventories were building up too quickly.
Opec President Sheikh Ahmad al-Fahd al-Sabah said the group would keep pumping nearly flat out at around 30.3 million barrels per day until it meets on June 15th to chart output policy.
Middle East Opec producers have been boosting production steadily since March to build a cushion of stocks ahead of a seasonal demand surge in the fourth-quarter winter months.
A stronger US dollar and signs of weaker demand growth from China have also pressured oil this month, encouraging speculators to liquidate long positions built up in the first quarter.