Oversupply fears push oil prices to five-month lows

Closing prices, below $50 a barrel, were the lowest since November 29, thereby erasing all the market gains that followed a late 2016 announcement by the Organization of the Petroleum Exporting Countries it would cut output.

"The market is looking for overall stock draws as evidence that the OPEC cuts are indeed driving global rebalancing", said Société Générale.

In the United States, meanwhile, job growth rebounded sharply in April and the unemployment rate dropped to 4.4 percent, near a 10-year low, according to government data.

Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas said according to CNBC, "There is an obvious compelling fundamental reason to extend cuts given the inventory objective-these are simply not declining fast enough (as acknowledged by Saudi Arabia and other producers) even if we were to account for seasonal factors that limit crude oil demand like refinery maintenance". The euro meanwhile touched six-months highs of nearly $1.10 ahead of France's weekend election, in which polls now expect centrist Emmanuel Macron to convincingly beat right-wing and anti-euro rival Marine Le Pen. World shares are up for a third week and hit a record high on Wednesday.

USA equities also were lower, with losers led by the energy sector, which fell 2.24 percent to its lowest since August. "I do think as long as OPEC maintains the cuts, the price will get some stability", Petromatrix analyst Olivier Jakob said.

USA crude stocks fell last week, while gasoline stocks increased and distillate inventories fell, the Energy Information Administration said on Wednesday.

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The dollar and US government bond yields barely budged though. Economists on average expect 185,000 jobs were created in April. The deterioration in sentiment also carried through to the currency market.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.69 percent and MSCI's gauge of stocks across the globe.MIWD00000PUS gained 0.36 percent after touching a record high.

China markets have also been wobbling in recent weeks but the commodity market woes have been the central focus.

Brent traded volumes on Thursday reached a record high of almost 542,000 contracts, suggesting that hedge funds had accelerated reductions to their long positions.

"It was somewhat disturbing that gasoline inventories went up yet another week, counter seasonally, and of course we saw continued increasing USA crude oil production", said Bjarne Schieldrop, chief commodities analyst at SEB Markets. "They either put up a defence here or risk further emboldening the bears for a run at the $40 threshold (for WTI)".

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