Oil futures settled higher on Thursday to recoup almost half of what they lost a day earlier, as traders held out hope that the recent price declines will help keep crude production at bay. Crude rose on Wednesday as stock markets gained worldwide and the greenback declined against most of its peers, making raw materials denominated in the currency more appealing to investors.
Advertisement
For oil, China’s latest crude import data (http://www.marketwatch.com/story/chinas-crude-imports-in-june-lowest-in-5-months-2016-07-13) also spurred more concerns as it showed the country’s buying of foreign crude dropped to a five-month low in June.
“It’s always the case a day after a big rally or sell-off for people to feel it was overdone”, said Phil Flynn, an analyst with Chicago brokerage Price Futures Group.
Oil fell amid forecasts prices may slide toward US$40 a barrel as consumption falters and halted supplies return. “I think $44 is a good support, as $40 or below will again deter investments”.
“Oil prices are being dragged lower on renewed oversupply concerns”, said IG Markets analyst Bernard Aw.
Brent crude oil was up 50 cents at $46.76 a barrel by 0745 GMT.
Futures fell as much as 1.4 per cent, paring a 2.1 per cent gain Thursday. The session peak was $45.80.
The grade rose 93 USA cents to settle at US$45.68 on Thursday.
Many had expected record driving trips and low pump prices to boost gasoline usage this summer.
The report pressured prices in a market already bearish after the International Energy Agency warned of a global oil glut, saying surging crude stocks have pushed floating storage to seven-year highs. A glut in refined products globally is putting crude under pressure, with Middle East grades in particular hit by low Asian demand.
Data on Thursday from market intelligence firm Genscape showed a 171,511-barrel build at the Cushing, Oklahoma delivery hub for WTI futures during the week to July 12, traders said.
Advertisement
“The oil market is oversupplied, OPEC production is on the rise and we had a rather bearish weekly USA oil stats report”, said Tamas Varga at London brokerage PVM Oil Associates.
