Investing.com - Crude oil futures remained a source of market volatility on Thursday, with prices turning higher after falling amid fears over a glut in supplies.
On the New York Mercantile Exchange, crude oil for delivery in March fell by as much as 2.18%, or $1.06, to hit a session low of $47.39 a barrel, before recovering to trade at $49.40 during U.S. morning hours, up $1.00, or 2.06%.
A day earlier, New York-traded oil futures plunged $4.60, or 8.67%, to settle at $48.45 after data showed that oil supplies in the U.S. rose to the highest level on record last week.
The U.S. Energy Information Administration said that U.S. crude oil inventories rose by 6.3 million barrels last week to 413.1 million, the most in records dating back to August 1982.
West Texas Intermediate oil futures rose nearly 19% in the four sessions to Wednesday, amid indications U.S. producers are pulling back on new production in response to low prices.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery rallied $1.50, or 2.77%, to trade at $55.66 a barrel, after falling by as much as $1.06, or 1.95%, to touch a daily low of $53.10.
On Wednesday, London-traded Brent tumbled $3.75, or 6.48%, to close at $54.16.
Brent prices climbed almost 17% in the four sessions leading up to Wednesday.
Capital expenditure cuts by major oil companies combined with a sharp reduction in U.S. rig counts are helping support prices amid hopes it will alleviate a glut in global supplies.
Oil prices have fallen sharply in recent months as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.
Meanwhile, market sentiment remained subdued as uncertainty over Greece's debt overshadowed a surprise move by China's central bank to cut bank reserve requirements, in a bid to boost lending and spur growth.
The European Central Bank said Wednesday it would no longer accept Greek bonds as collateral for lending, shifting the burden on to Greece’s central bank provide additional liquidity for its lenders and increasing pressure on Athens.
The announcement came after Greece's new finance minister Yanis Varoufakis said the ECB would do "whatever it takes" to support member states such as Greece following a meeting with ECB President Mario Draghi.
Greece’s government is seeking debt relief on its current €240 billion bailout, which has fuelled fears over a clash with its creditors that could bring about its eventual exit from the euro zone.
Athens main stock index plunged on Thursday, while the yield on Greek 10-Year bonds rose sharply to hover just below the 11%-level.
On the data front, the U.S. was to produce its weekly report on initial jobless claims in addition to data on the trade balance.
Traders also looked ahead to the release of the latest U.S. nonfarm payrolls report on Friday, for further indications on the strength of the recovery in the labor market.
Market analysts expect the data to show that the U.S. economy added 234,000 jobs in January, slowing from a gain of 252,000 in December, while the unemployment rate was forecast to hold steady at 5.6%.