Oil prices edged up on Friday, recovering some of their steep losses made this week, but crude remained on course for its worst first-half decline in almost two decades as production cuts have failed to sufficiently reduce oversupply.

Brent crude futures were up 28 cents at $45.50 a barrel at 0830 GMT. U.S. West Texas Intermediate (WTI) crude futures traded at $43.04 a barrel, up 30 cents on their previous close.

Oil prices have fallen about 20 percent this year despite an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by 1.8 million barrels per day (bpd).

That puts the market on course for its biggest first-half percentage fall since the late 1990s, when rising output and the Asian financial crisis led to sharp price falls.

"There is selective perception in the market at the moment. Bearish factors like higher output in Libya or Nigeria result in lower oil prices but bullish factors, like the really high OPEC commitment, are ignored," said Frank Schallenberger, head of commodity research at LBBW in Stuttgart.

He added he expects prices to bottom out between $40-45 per barrel before returning to $50 until the end of the year, buoyed by higher demand and continued OPEC and non-OPEC production cuts.

Analysts at J.P. Morgan are more skeptical and expect prices to fall again next year.

"By early 2018, the combination of record U.S. production and deteriorating OPEC compliance probably returns average prices to the mid-to-low $40s," J.P. Morgan analysts said in their half-year outlook.

At the heart of the ongoing glut is that recent efforts to reduce production by OPEC suppliers as well as Russia has been met by soaring output from the United States and OPEC members Libya and Nigeria, which are exempt from the cuts.

Thanks to shale drillers, U.S. oil production has risen by over 10 percent in the last year to 9.35 million bpd, close to the level of top exporter Saudi Arabia.

"Rising U.S. output continues to stress markets, with increasing evidence that improved efficiency and technology makes many of the shale plays profitable below $40 a barrel," said analysts at Cenkos Securities.