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The oversupply in the oil market seems to be getting worse, with no signs of recovery in prices.

The US rig counts rose to the highest level since April 2015 even as Opec exports hit a two-year high, exacerbating concerns over oversupply and hitting prices hard.

On Friday, Brent crude fell 2.91 percent to close at $46.71 per barrel, after falling to $46.28, its lowest in more than a week. The West Texas Intermediate closed 2.83 per cent lower at $44.23 per barrel. Both the benchmarks marked the sixth weekly decline in the past seven weeks.

“Lower lows and lower highs continue to attract short-selling, and with Opec currently unable to bring down production, the price of Brent crude oil is likely to remain stuck below $50 per barrel for the time being,” said Ole Hansen, head of the commodity strategy at Saxo Bank.

Despite healthy compliance by some members of the Organisation of Petroleum Producing Countries (Opec) to cut output, oil prices have not been able to sustain the keenly watched $50 per barrel mark due to rising US output.

Nigeria and Libya, which are exempted from cutting production, have been ramping up production, making the case weak for any signs of the much-talked about rebalancing in the market.

“With Opec failing to lower production as Libya and Nigeria continue to ramp up output, the oil price could be forced to reach a level where US high-cost producers refrain from increasing production further,” Hansen said.

But analysts say they would be waiting for more drawdown in US inventories and summer demand in the west for the market for any signs on rebalancing to support the market.

“To support prices in the mid-$50s, Opec would probably need to lower production by another 200-300 thousands of barrels per day and extend the output agreement to end-2018. We find this unlikely, which then raises the question where else the oil price will force the market to rebalance? The most likely place for this is US shale, with its short cycle times and current strong growth trajectory,” said Martijn Rats, an analyst at Morgan Stanley said in a note.

The Opec and non-Opec countries led by Russia agreed to extend production cuts by another six months in May by 1.8 million barrels per day in order to curb excess supplies from the market, but that move has yet to yield desired results.

Dollar eyed:

After the bout of weakness, the dollar managed to gain ground last week due to reports of a stronger job market in the US.

“The initial reaction of the greenback and Treasury yields after the release was kind of mixed. In fact, there was a tug of war between bulls and bears suggesting that some market participants were not entirely convinced in the overall report. This is due to lack of significant wage growth which has been disappointing for many months now,” said Hussein Sayed, Chief Market Strategist at FXTM.

This week equity market traders will eye the Federal Reserve chief testimony to the US Congress and will try to get hints at the extension of her term.