1st LD Writethru: U.S. oil price drops amid supply glut

U.S. oil prices retreated Friday as U.S. crude inventories increased more than expected last week.

U.S. crude stockpiles increased 10.1 million barrels to 397.9 million of the week ended on Jan. 16, 46.6 million barrels more than a year earlier, according to the Energy Information Administration (EIA) report released Thursday.

Meanwhile, inventories at Cushing, Oklahoma, the delivery point for the contract, gained 2.9 million barrels to 36.8 million barrels.

U.S. crude production decreased slightly to 9.186 million last week, according to EIA data.

U.S. oil price was also dragged by the slower global growth outlook. The International Monetary Fund (IMF) lowered its global economic growth forecast to 3.5 percent and 3.7 percent for 2015 and 2016 respectively Tuesday.

Brent crude moved up amid uncertainty over Saudi oil output following the death of King Abdullah.

Markets predicted that Saudi Arabia's oil strategy of maintaining output levels will remain unchanged following the death of Saudi King Abdullah. Salman, the late king's brother and successor to the throne, is expected to continue the policy of protecting market share.

Light, sweet crude for March delivery lost 72 cents to settle at 45.59 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery moved up 27 cents to close at 48.79 dollars a barrel. Endite