Standard Chartered bank said there was “no fundamental justification for recent oil-price falls” and “the global oil market has rebalanced, and USA crude supply and inventories are expected to fall”.
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“Prices began to recover following the publication of the US inventory data [on Wednesday], and continued to do so into the morning”, Commerzbank said in a note.
The commodity rose around six percent over Wednesday and Thursday after an energy report showing United States gasoline stockpiles had slipped last week.
The inability of gasoline stocks to erase the amount of excess barrels in storage relative to historical levels so far this summer has been a factor behind oil’s slide.
At about 1545 GMT, US benchmark West Texas Intermediate for delivery in September won 85 cents to $40.36 per barrel. The Energy Information Administration’s weekly report showed a larger-than-expected 1.4 million-barrel increase in crude stockpiles during the week ended July 29, a sign of weakening demand.
Crude prices might take an upward trend in the fourth quarter as refinery maintenance winds down and fuel demand picks up.
At Cushing, Oklahoma – delivery point for the NYMEX crude oil futures contract – crude stocks fell 1.123 million barrels to 64.092 million barrels.
October Brent crude LCOV6, -0.54% on London’s ICE Futures exchange fell 27 cents, or 0.6%, to $44.02 a barrel.
“The US shale gas industry has dealt with low oil prices extremely well and adapted far quicker than Opec anticipated when it chose to let the market drive out higher cost producers”, Craig Erlam, senior market analyst at Oanda, said. Failure to hold $40 a barrel, however, could inspire a run toward $38, he said.
Oil traded near a four-month low in NY on signs the global supply surplus persists even as stockpile declines in the USA pare the excess.
But Cohen said Wednesday preliminary indicators ahead of the summer suggested that gasoline demand in the United States would rise 4 to 5 percent from past year.
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Oil prices fell in Asia on profit-taking on Friday following two days of gains, but analysts suggested there could be some extra gains after recently falling below $40 a barrel.
