Brent crude oil futures for August delivery had gained 31 cents or 0.54% to settle at $56.85 a barrel yesterday, 7 July 2015.
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“The rapid increase in China’s apparent oil demand growth has been due first and foremost to stockpiling, while real demand has also been supported somewhat by low oil prices”.
That provided some relief to those investors who feared that a “Grexit” would lead to more financial turmoil and less economic growth across Europe, which would in turn be bad for oil demand.
Previous year saw 8.7 million barrels of oil produced each day on average.
“The selloff was about China, and the stock market there has started to stabilise so we have started to recover from oversold levels”, said Amrita Sen, chief oil analyst at Energy Aspects.
United States oil prices dropped for the fifth straight trading session Wednesday as domestic crude stockpiles rose again.
Expectations that western powers will strike a nuclear deal with Iran in the coming days has refocused the market on the return of additional exports of Iranian barrels, which have been sharply curbed by sanctions in recent years.
Friday’s gains, however, were unlikely to extend much further, analysts said, as global supplies remained plentiful. The agency’s price forecast for the best grade of USA oil was $5 less than its European counterpart.
The differences between rival Sunni Saudi Arabia and Shiite Iran also could point to lower oil and gasoline prices ahead.
With crude showing no signs of rebounding soon – the EIA expects West Texas Intermediate will rebound to $62 per barrel next year – drivers should continue seeing discounts at the pump for the rest of 2015.
Worldwide oil prices plummeting after Greece rejected debt bailout terms on Sunday opens up interesting possibilities for the crude market as well as for India, experts opine. That surprised market players a day after industry group the American Petroleum Institute had reported a draw of 1 million barrels.
Prices could drop even more if tiny Libya gets some measure of stability, Williams said. The number of active oil rigs in the U.S. rose by 12 to 640 last week, ending the longest decline on record, according to data compiled by Baker Hughes.
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A slew of global economic and geopolitical factors are working to pummel the price of oil and set up US drivers for very low gasoline prices later this year.
