Oil prices head for seventh weekly fall as producers show no sign of cutting output

Oil prices were heading for a seventh weekly loss on Friday, with key producers showing no signs of cutting the fuel's output in the face of a global supply glut.

Brent and US crude futures both hit their lowest since 2009 this week and are down more than 50 per cent from June, although they inched up on Thursday after robust US economic data brightened the outlook for demand.

Brent crude prices had climbed up by 21 cents to US $51.17 a barrel by 07:33 am. US crude price for February delivery was up 34 cents at US $49.13.

But supply concerns remained as Saudi Arabia and its Gulf OPEC allies continued to show no sign of considering cutting output to boost oil prices even as demand slowed globally.

"Without any changes to fundamentals, selling appears largely to be jittery investors looking for supply-demand equilibrium," ANZ analysts said in a note.

Traders were wary of calling a floor price at US $50 in the overwhelmingly bearish oil markets.

"We've seen oil hovering at around US $60, but it fell way below," an Asian oil trader said.

Supply is piling up with some of the world's largest oil traders hiring supertankers this week to store crude at sea.

BNP Paribas has cut price forecasts for Brent and West Texas Intermediate (WTI) crude by over US $10 per barrel.

The global financial services provider expects Brent price to average at US $60 per barrel in 2015, lower by US $17 from its previous forecast in November. The 2015 WTI average has been revised down to US $55 from US $70.

"Supply issues will dominate demand in terms of fundamental factors, with the market focusing on how the current supply surplus will ultimately resolve itself," BNP said.

Meanwhile, annual consumer inflation in China remained near the lowest in five years, signalling persistent weakness in the world's largest energy consumer.

(Reuters)