Crude prices steadied in choppy trading on Friday, with Brent on track to its largest weekly drop in six months, as strong US jobs data and bargain hunting by investors pitted against seasonally weak consumption of oil.
The oil market initially rose about 1% or more after the US economy posted the largest job gains in eight months in Juneand on worries about fresh militant attacks on Nigerian oil infrastructure. But the gains faded after concerns over supplies later returned.
"It's choppy and will likely stay so," said David Thompson, executive vice-president at Washington-based commodities broker Powerhouse. "It'll be a tug of war today between the very strong jobs numbers and the existing bearish oil market fundamentals."
The market will also be on the lookout for this week's US oil rig count from industry firm Baker Hughes at about 6pm Irish time. US drillers last week added oil rigs for a fourth week in five, in the best month of producers returning to the well pad since August that signaled a near-two year rout in drilling may have ended.
Brent crude futures were up 20 cents, or 0.4 percent, at $46.60 per barrel after a session low at $46.15
U.S. crude's West Texas Intermediate (WTI) futures rose by 15 cents to $45.29 versus a drop earlier to $44.77.
Both benchmarks were down nearly 8% for the week - the largest weekly slide for Brent since January.
Crude futures remain some 75% above 12-year lows of $27 for Brent and $26 for WTI hit in the first quarter. But the market has gyrated since hitting above $50 as a glut of refined products replaced worries about crude oversupplies that caused a near two-year long tumble earlier.
Futures hit two-month lows on Thursday, with WTI breaking below key support of $45.83 after weekly drawdowns in US crude looked inadequate to assuage investor concerns.
"I think we have strong support at $44 for WTI now. Some of the gloom and doom on demand destruction for oil has gone away with the US jobs numbers," said Phil Flynn, analyst at Chicago-based brokerage Price Futures Group.
"US shale oil continues to hurt, as many banks are exiting the segment in general," fuel hedging firm Global Risk Management said in its second-half 2016 oil market outlook.
Traders said, however, that the outlook would likely be choppy as the threat of supply reductions could tighten markets.
"The increased unrest and attacks on pipelines among others in Nigeria and Iraq affect the countries' oil output," Global Risk Management said.
However, an ongoing glut in refined products, especially in Asia and North America, as well as slowing economic growth weighed on oil.
"Refining margins were down sharply in all regions over the last week and gasoline cracks went into free fall," US investment bank Jefferies said.
Asian benchmark Singapore gasoline margins have slumped more than 86% this year to just $2.28 barrels, the lowest since the fourth quarter of 2013.
