Brent crude oil remained below $50 per barrel on Wednesday, weighed down by another rise in OPEC supplies despite a pledge to cut production, but geopolitical tensions in the Korean peninsula and the Middle East put a floor under prices.
Brent crude futures, the international benchmark for oil prices, were at $49.60 per barrel at 0651 GMT, little changed from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down 6 cents at $47.02 per barrel.
Despite the dips, both markets have recovered around 12 percent from recent lows on June 21, although crude prices seem locked below $50 per barrel.
“Oil bulls have numerous obstacles to overcome,” said Stephen Schork of the Schork Report, pointing to rising OPEC output and high production in the United States.
Oil exports by the Organization of the Petroleum Exporting Countries (OPEC) climbed for a second month in June, according to Thomson Reuters Oil Research, despite its pledge to hold back production between January this year and March 2018 to prop up prices.
OPEC exported 25.92 million barrels per day (bpd) in June, 450,000 bpd above May and 1.9 million bpd more than a year earlier.
“With global floating storage at a five-year high and OPEC production edging higher, oversupply remains a key issue for the oil market,” said Dutch bank ING.
Despite ample supplies, traders said that prices were kept from falling further due to global security risks following North Korea’s repeated missile tests and the political crisis between Qatar and an alliance of Arab nations led by Saudi Arabia and the United Arab Emirates.
“Rising geopolitical risks should provide some support to gold and oil prices,” ANZ bank said on Wednesday.