Still, at around 0930 IST the USA benchmark West Texas Intermediate (WTI) for delivery in March was up $1.47, or 5.61%, at $27.68 and Brent crude for April advanced $1.68, or 5.59%, to $31.74 a barrel.
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North Sea Brent near-month futures closed $3.30 higher at $33.36 a barrel, after sliding below $30 on Thursday.
It was reported yesterday that Opec producer Iran has undercut oil from Saudi Arabia as it hopes to win more customers after sanctions were recently lifted. At the end of last week, the USA had 502 million barrels of crude oil in its inventories, compared to 417.9 million barrels a year ago.
Patrick DeHaan, a senior petroleum analyst at Gas Buddy dot com, said OPEC still appears to be the driving force behind the low oil prices.
Oil prices have tumbled over 70 percent since mid-2014 as producers pump 1-2 million barrels of crude every day in excess of demand just as global economic growth stalls, led by China’s slowdown.
There is a widely-held belief oil prices will remain low throughout the remainder of the year and any recovery will be capped at the US$50/60 a barrel, rather than the US$128 achieved in 2011.
Global oil supply fell by 200,000 bpd in January to 96.5 million bpd as higher OPEC output was only partially offset by a dip in non-OPEC production.
Saudi Arabia has always said it was willing to talk, but “sources” say there’ll be no action unless Iran agrees to a production freeze.
― Reuters picHONG KONG, Feb 12 ― Oil rebounded from the lowest level in more than 12 years amid the highest price volatility since 2009 as speculation swirls over whether producers will act to bolster the market.
At their last major meeting OPEC members actually increased their output ceiling a bit and said that in order for an output cut to happen OPEC wants the cooperation of non-OPEC members for a unified output cut.
“Given the short positions and the traders involved here, it is not impossible that this is an attempt to push it through the low and induce some technical selling”, he said by telephone from Sydney. Consequently, the United States Oil Fund LP (ETF) (NYSEARCA:USO) was trading up by 50 basis points (bps) as of 7:12 AM EST during pre-market trading today. The contract pared weekly losses to 2 per cent.
Prices dropped 4.7 percent this week and 21 percent this year.
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Gasoline futures settled up 10.15 cents, or 10.8%, at $1.0432 a gallon. BP Plc Chief Executive Officer Robert Dudley this week said the company was “very bearish” on oil during the first half of 2016, while trader Vitol Group BV sees a decade of low prices. “Until we hear an indication from a country or from a large producer that they are prepared to cut their own production, I would severely discount these comments”, he told AFP by telephone from Sydney.
