Both Brent and USA crude are in bear-market territory, having lost more than 20% from peaks reached in late April.
US oil output rose to a record 12.4 million barrels per day (bpd) in the week to May 31, the Energy Information Administration said on Wednesday.
Global benchmark Brent crude futures were up $1.05, or 1.7%, at $61.68 a barrel around 2:30 p.m. ET.
Oil prices dipped below $60 a barrel yesterday for the first time since January after a surprise increase in stockpiles in America. This decline in oil prices coincided with the renewed tensions between the USA and China, as well as new tariffs being imposed by the United States on Mexico.
USA crude stocks rose unexpectedly last week, while gasoline and distillate inventories built more than expected, industry group the American Petroleum Institute said on Tuesday.
Oil prices plunged on Wednesday, with futures falling to their lowest since January, after the US government reported an unexpected surge in the nation's crude stockpiles.
In addition to the OPEC+ cuts, supply has also been limited by USA sanctions on oil exports from Iran and Venezuela. WTI settled $1.80 lower at $51.68 a barrel, falling 3.4% to its weakest closing price in almost five months.
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Brent crude traded at $61.35 a barrel while West Texas Intermediate (WTI) traded at $52.62 a barrel.
Hedge funds and other money managers cut their net long U.S. crude positions last week as prices plunged, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
United States oil inventories are a critical marker for investors who are looking at a balance being created in markets.
The severe downturn in a matter of weeks comes as oil traders fret over slowing global growth that the Trump administration's unresolved trade disputes with China and Mexico have only exacerbated. Producers in Mexico ship vehicle components, televisions, clothing, alcohol, agricultural products and fuel to the U.S.in daily trade amounting to $1.7 billion.
According to analysts at UBS, crude can be expected to rise to as much as $75 per barrel in the next 3 months. This decision will coincide with the USA summer driving season, which will help clear out American oil inventories.
The rise in US stockpiles and fresh leg lower for crude prices comes as OPEC and its oil market allies are preparing to meet to decide production policy in the coming weeks. These depressed prices are good news for consumers, but bad for Opec's petrodollar economies led by Saudi Arabia, which wants the group and its allies to extend production cuts at least until the end of the year.
Russian Federation is pitching in the biggest cuts among non-OPEC producers in the alliance.