After the biggest sell-off in four weeks, oil has rebounded. The bearish tones rushed across markets despite industry data showed US crude and gasoline inventories depleted.
Last week, stockpiles dropped by more than 5.5 million barrels, according to the American Petroleum Institute. Today’s inventories are also expected to fall by 2.4 million barrels.
However, oil remains bound to a bear market over concerns that Libya and the US will rise supply, thus erode Organization of Petroleum Exporting Countries’ efforts to curtail output.
The market is extremely sensitive to any inkling of rising stockpiles, while it is not so sensitive to data showing falling supplies. This leaves oil tied to a bear market, struggling under the $50 mark.
The international benchmark, Brent oil, added 1.4%, or 65c, to average out at $48.44 after slipping 3.7% on Wednesday, to $47.79.
Meanwhile, crude oil jumped 65c on Thursday after slumping to $45.13 the previous day.
What’s next for oil prices?
US shale drilling is gaining momentum at a surprisingly fast pace, therefore raising concerns among investors that the 2018 market may be flooded with oil supplies.
Saudi Arabi slashed August pricing for crude to Asia as it struggles to remain competitive.
US strategic stockpiles have slumped to the lowest level in over a decade as the shale boom provides a buffer against shortages.