Oil price edges up to beyond $60, a day after sharp drop

Oil prices have gained ground, edging up to above $60 a barrel and compensating an earlier $3 drop, news agencies report.

North Sea Brent crude, the European benchmark, for April delivery gained $1.22 to $60.76 a barrel in London midday deals on Tuesday.

A day earlier, Brent dropped more than $3 as traders refocused on growing supplies, which have sharply driven oil prices down more than 60 percent between June last year and January this year.

New York’s West Texas Intermediate (WTI) for April delivery won 71 cents to $50.30 a barrel.

Analysts say a drop in US rig counts has been conducive to oil prices.

“Brent crude prices (are) attempting to rally on rapid week-on-week reduction in US … rig count,” Morgan Stanley, US multinational financial services corporation, said in note. The US cut its oil rig count by 33 last week.

But US production and output in the Middle East continue to stand high.

“Oversupply is still an issue, and this caps the upside potential of oil prices in this supply-driven market,” said Hans van Cleef, senior energy economist with Dutch bank ABN AMRO.

The slump in oil prices since last June has been a boon for Asian importers.

“Cheap oil is a blessing for Asia, the drop in oil prices provide windfall effects for Asia’s large net oil importers,” ABN AMRO said in its quarterly outlook.

Official data showed China’s January crude oil throughput grew to 9.27 million barrels per day, up 0.6 percent on last year. China is a major oil consumer in Asia.