Oil prices saw a few support earlier on Thursday from Chinese crude imports data, which showed a near 9 percent hike from January through September.
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US benchmark West Texas Intermediate crude continued a Thursday selloff after the report was released, heading down $1.23 to $45.41 per barrel in midday trading.
A late rally helped crude oil pare losses Thursday, but the surge did little to quell industry fears that the rapidly increasing amount of oil tucked into USA storage could soon drive down prices for oil and the fuels that come from it.
Brent’s new front-month December contract gained 42 cents, or 0.84 percent, at $50.15 a barrel after ending up 4 cents at $49.73 a barrel.
Data from industry group the American Petroleum Institute showed USA crude stocks rose by 9.4 million barrels in the week to October 9 to 465.96 million, versus analyst expectations for a 2.8 million barrels build. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.4 million barrels, API said.
Oil price are likely to jump much faster than the market now expects in order to meet expected demand by the end of the decade according to Barclay.
“This kind of illustrates there’s still a lot of oil out there”, said Peter Donovan, broker for Liquidity Energy in New York. “No matter whether we assume higher supply or lower demand, higher prices than the market now believes are required to offset existing field declines”.
Traders who move based on charts were largely behind that speculative move higher, a common trend this year, said Tariq Zahir, managing member of Tyche Capital Advisors.
Oil has retreated on signs the market remains oversupplied after advancing above $50/bbl last week for the first time since July.
Maybe oil is going to party and bottom like its 1999! Many refineries go into regular maintenance after the end of the summer driving season. Output reductions are “purely a short-term measure, and in the future it will result in a greater misbalance of the oil market”, Energy Minister Alexander Novak said in an interview with CNBC.
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Domestic crude inventories grew to 469 million barrels last week, from 461 million last week, the EIA said. The country pumped 2.8 million barrels a day last month, according to data compiled by Bloomberg. This is 3.7% lower than August’s production total.
