Oil prices rose on Monday, extending last week's gains, but the persistent global supply glut will likely cap advances, analysts said.
US benchmark West Texas Intermediate for delivery in May won 68 cents to $52.32 a barrel. Brent North Sea crude for May gained 79 cents to $58.66 around midday in London.
"There has been a continuation in the rise of oil prices from Friday's session, but the market has started this week cautiously due to the ongoing oversupply situation," said Michael McCarthy, chief market strategist with CMC Markets in Sydney.
Both contracts closed last week up more than five percent thanks to a drop in the number of US oil rigs in operation, better economic data from Germany and easing expectations that Iranian oil would return to the market soon after a deal with Western powers over its nuclear program.
But Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services firm EY, said: "Increases in crude oil inventory in the US and the announcement of record output of crude by Saudi Arabia in March helped to limit gains in benchmark prices."
US inventories in the week to April 3 surged nearly 11 million barrels to a fresh record high of 482.4 million, the US Department of Energy said.
Meanwhile in Saudi Arabia, Oil Minister Ali Al-Naimi announced output hit a record 10.3 million barrels a day in March.
The global oil market lost about 60 percent of its value to about $40 per barrel between June and late January, owing largely to an oversupply in world markets and the OPEC’s refusal to cut production.
The drop in big oil companies’ profits in the past eight months isn’t just a function of lower crude prices - it also reflects strategic choices.
A Reuters examination of corporate filings by some of the biggest players in the industry, including BP, Shell and France’s Total, shows the sensitivity of these companies’ earnings to changes in oil prices has risen in recent years.
This means that for every dollar the oil price drops, their profits sink more than they might have done five years ago. Choices made by several oil majors that built more exposure to prices into their portfolio, mainly through the kinds of contracts they opted to sign, was aimed at enjoying prices that were historically high
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