* Investors pile new cash into commodities
* Producers hedge at higher prices
* But market remains oversupplied
* Crude oil rally: http://tmsnrt.rs/1SeW0aW
By Henning Gloystein
SINGAPORE, April 22 (Reuters) - Oil prices rose in Asian
trade on Friday, setting crude futures on course for one of
their biggest weekly gains this year, as sentiment has become
more upbeat despite ongoing oversupply.
International benchmark Brent crude futures LCOc1 were
trading at $45.09 per barrel at 0054 GMT, up more than half a
dollar from their last settlement.
U.S. West Texas Intermediate (WTI) crude was up 52 cents at
$43.70 a barrel.
With Brent up 8 percent since Monday and WTI 12 percent
higher since April 18, this week is set for some of the steepest
price rallies so far this year, and crude is up by more than
two-thirds since its 2016 lows between January and February.
Traders said that sentiment in the entire commodity complex
had turned more confident, with new cash being put into the
market by investors, lifting prices.
Another factor has been producers taking advantage of higher
prices by locking in production.
"We would expect producers in the U.S. taking every
opportunity to aggressively hedge as soon as there is
opportunity when oil prices recover for short periods of time,"
French investment bank Natixis said.
Falling output, especially in the United States, where many
producers are shutting down following an up to 70 percent price
rout since 2014, is also helping to lift the market.
Natixis said it expected U.S. oil production to drop by at
least 500,000 to 600,000 barrels per day (bpd) this year,
compared with 2015, and by another 500,000 bpd in 2017.
Despite the recent rally, oil markets remain oversupplied as
between 1 and 2 million barrels of crude are being pumped out of
the ground every day in excess of demand, leaving storage tanks
around the world filled to the rims with unsold fuel.
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CHART-Crude oil rally http://tmsnrt.rs/1SeW0aW
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(Editing by Ed Davis)