A surprise drop in U.S. crude inventories steadied oil from several days of falling prices
Oil rebounded from several days of falling prices after industry data showed a surprise drop in U.S. crude inventories and offset weak economic readings in the United States that have depressed global stock markets.
Brent crude LCOc1 rose 47 cents, or 0.8%, to $59.36 a barrel by 0657 GMT, claiming back some of the ground lost over the past three sessions. U.S. West Texas Intermediate crude CLc1 was at $54.29 a barrel, up 67 cents or 1.3%.
Front-month WTI prices settled down for a sixth straight session on Tuesday, their longest losing streak this year, after U.S. manufacturing activity dived to a 10-year low as U.S.-China trade tensions weighed on exports.
Brent and WTI have erased those (Tuesday) losses in early trade, Jeffrey Halley, a senior market analyst at OANDA in Singapore said, although the trading volume was low because of regional holidays.
He said they would expect the rallies to quickly run out of steam as the prices approach $61.00 and $55.00 a barrel.
Oil pared some losses in post-settlement trade on Tuesday after American Petroleum Institute (API) data showed U.S. crude stocks fell last week by 5.9 million barrels, against expectations for an increase of 1.6 million barrels.
The Energy Information Administration’s weekly oil inventories report is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.
Oil prices are now below levels from before the disruption at Saudi oil facilities as the world’s largest oil exporter has restored its full oil production and capacity.
That means the market is not pricing in any risk premium from further potential attacks, said Howie Lee, economist at Singapore’s OCBC bank.
The energy market must be non-political in order to prevent unilateral and illegal interference, Iranian Oil Minister Bijan Zanganeh said upon arrival in Moscow for a meeting of the Gas Exporting Countries Forum.
Separately, Ecuador, one of the smallest members of the Organization of the Petroleum Exporting Countries (OPEC), said on Tuesday it will leave the 14-nation bloc from Jan. 1 due to fiscal problems. The South American oil producer will be the second to withdraw from OPEC in the last year after the departure of Qatar.