Over the previous two sessions, oil fell 6%, pressured by data showing large weekly builds in United States petroleum products and forecasts by the world's energy watchdog and Opec that signaled the global crude glut could persist into 2017.
The EIA (U.S. Energy Information Administration) estimates that the global crude oil supply could outstrip demand by 1.1 MMbpd (million barrels per day) in 2H16-compared to 2.2 MMbpd in 1H16. The U.S. government will issue official inventory data on Wednesday, which is expected to show an increase of 4 million barrels last week - the biggest increase since April.
Brent crude futures were up 85 cents, or 1.9 percent, at $46.70 per barrel by 12:01 p.m. EDT (1601 GMT).
Oil prices rallied in early August, rising from four-month lows near $42/bbl to briefly above $50/bbl amid peak summer demand for crude oil, which is expected to lead to the first quarterly crude stock draw in more than two years, the IEA said.
"The process of shaving an additional $4.50 a barrel off of the crude benchmarks could require another couple of weeks", said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates. "With the price of oil at current levels, one would expect supply to contract and demand to grow strongly".
Oil prices rose as much as 2 percent on Thursday, tracking a surge in gasoline futures and higher USA equity markets that helped stem a two-day rout in crude futures.
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The country has increased its output by 400,000 barrels per day (bpd) since May 2016 and reached the level of 10.6 million bpd in August, while US oil output decreased by 460,000 bpd in the reported period.
The Organization of the Petroleum Exporting Countries, led by Saudi Arabia and other big Middle East crude exporters, will meet non-OPEC producers led by Russian Federation at informal talks in Algeria between September 26 and 28.
Oil has fluctuated since rallying in August amid speculation the Organization of Petroleum Exporting Countries and Russian Federation would agree on measures to stabilize the market at a meeting in Algiers later this month.
Hopes for a sustained rebound in demand were dashed this week by fresh warnings a global supply glut would persist for longer than previously thought.
Nigeria and Libya are both preparing to ramp up their oil exports, which may weigh on oil prices. During the day, WTI Crude was seen trading at US$45.02 per barrel, and Brent crude was at US$47.19 per barrel.