Oil headed for the first weekly decline since February as OPEC production rose and expanding US stockpiles kept inventories at the highest level in more than eight decades.
Futures declined as much as 1.6 percent in New York, down 4.2 percent for the week.
The Organization of Petroleum Exporting Countries increased supply by 64,000 barrels to 33.09 million a day in March as Iraqi output gained and Iran pumped at the highest level in almost four years, according to data compiled by Bloomberg.
A US government report Wednesday showed crude supplies rose for a seventh week to the most since 1930.
“The market is still oversupplied,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by phone.
“Trading will probably remain around the mid-to-upper $30 level range with anything above $40 being sold.”
Oil still rose 14 percent in March after rebounding from a 12-year low this year amid speculation the global glut will ease as US output falls.
Russia’s Foreign Minister Sergei Lavrov and his Venezuelan counterpart discussed by phone the prospects of developing cooperation between OPEC and other producing states, according to a statement on the Russian Foreign Ministry website.
West Texas Intermediate for May delivery lost as much as 63 cents to $37.71 a barrel on the New York Mercantile Exchange and was at $37.79 at 1:03 p.m. Hong Kong time.
The contract gained 2 cents to close at $38.34 on Thursday. Total volume traded was about 10 percent below the 100-day average. Prices rose 3.5 percent in the first quarter.
Brent for June settlement fell as much as 60 cents, or 1.5 percent, to $39.73 a barrel on the London-based ICE Futures Europe exchange.
The May contract expired Thursday after gaining 34 cents to $39.60. Front-month prices rose 10 percent last month. The global benchmark crude was at a premium of 64 cents to WTI for June.
Iranian output rose by 100,000 barrels a day to 3.2 million last month, the most since May 2012, according to a Bloomberg survey of oil companies, producers and analysts.
Sanctions against the nation, which were strengthened in July 2012, were lifted in January. Iraq pumped an additional 150,000 barrels a day while Saudi Arabia’s production was little changed.
OPEC and oil market news:
-Colombia’s Ecopetrol SA can activate some fields if oil rises to $45 and above, Chief Executive Officer Juan Carlos Echeverry said in Bogota.
-Nigeria will nominate Mohammed Barkindo, former group managing director of state-owned Nigerian National Petroleum Corp., for the position of OPEC secretary-general, according to two people familiar with the matter.