Brent crude oil slips under $57 as IEA sees worse glut

LONDON (Reuters) - Brent (brent.167)crude oil slipped under $57 a barrel on Friday after the West's energy watchdog said a global oil glut was building as U.S. oil production showed no signs of slowing.

Brent for April was down 30 cents at $56.78 by 0530 ET. U.S. crude was down 20 cents at $46.85.

"U.S. supply so far shows precious little sign of slowing down," the International Energy Agency said in its monthly oil market report. "Quite to the contrary, it continues to defy expectations."

The agency said the United States could soon run out of spare capacity to store crude, putting additional downward pressure on prices. That process would last at least until the second half of 2015, it said.

"The market will be more balanced in the second half, but there is still a massive oversupply in the first half," said Barbara Lambrecht, analyst at Commerzbank in Frankfurt.

"We still expect oil prices to fall in the coming weeks due to rising inventories," she added.

News of a tentative deal to end a strike by U.S. refinery workers helped support oil prices as it could help to increase demand for crude oil for processing in the world's biggest oil consumer.

The strike, the largest walkout by U.S. refinery workers in 35 years, has affected around a fifth of the oil processing capacity in the United States, limiting throughput.

The deal could reduce U.S. crude stockpiles, which climbed last week to the highest level for this time of year in more than 80 years.

Investors kept an eye on developments in Libya, where three-quarters of oil production has been kept off line by fighting between rival militias.

Islamist militants claimed responsibility for a bomb attack in the Libyan capital, Tripoli, even as production from the OPEC member's western oilfields saw a surprise comeback.

(Additional reporting by Keith Wallis in Singapore; Editing by William Hardy)

WhatsAppFacebookTwitterLinkedinBeloudBluesky