March 17 (UPI) -- Crude oil prices posted modest gains early Friday as traders saw some optimism in emerging supply data, though exploration figures could weigh on the rally.
Crude oil prices extended gains in the latter half of the week after the U.S. government reported the first decline this year in domestic oil inventory levels. That could signal some of the supply-side pressures are starting to fade in a market pressured by an ongoing glut.
Rallies late in the week were muted, however, as traders looked at broader economic issues like U.S. budget plans from the White House, labor figures and a move this week by the U.S. Federal Reserve to increase it's key policy rate.
"The oil market shifted back into wait-and-see mode yesterday as the afterglow from the first draw in U.S. crude stocks of the year faded," Stephen Brennock, an analyst with broker PVM, said in a daily newsletter. "Enthusiasm was in short supply even as the dollar extended its decline after the Fed, which tightened policy earlier this week, subsequently moved to temper expectations regarding the pace of future interest rate hikes."
The price for Brent crude oil was up 0.44 percent about a half hour before the start of trading to $51.97 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.5 percent to $49 per barrel.
Prices may react later this morning when Baker Hughes releases weekly data on exploration and production activity. The company's rig counts serve as a loose gauge for confidence in a particular geographical sector and gains, particularly in the United States, may be watched closely by traders.
U.S. crude oil production last week topped 9 million barrels per day and was above levels from the previous week and year-over-year. The oil minister from Saudi Arabia, which is leading an effort from the Organization of Petroleum Exporting Countries to balance the market, said major producers were taking a wait-and-see approach to the resiliency of U.S. shale.
Markets plummeted last year in the wake of strong U.S. shale oil output and a policy from OPEC to defend its dominance with a robust production policy.