Oil rebounded from earlier losses amid signals of stronger-than-expected American demand and an International Energy Agency forecast that global supplies may be in bigger danger than previously thought.
Futures rose as much 1.2 percent in New York on Thursday. Prices climbed after Genscape Inc. was said to report a large decline in stockpiles at the biggest U.S. storage hub in Oklahoma. That withdrawal followed the IEA’s warning that output cuts announced last week by OPEC and allied exporters may be exacerbated by sanctions against Iran and Venezuela’s economic collapse.
Combined output losses from Iran and Venezuela could reach 900,000 barrels a day during the second quarter of next year, more than double the 800,000 barrels OPEC plans to remove from world markets, the IEA said on Thursday.
Crude remains in a bear market after reaching a four-year high in early October as investors worry about a glut. Record American output, expected to boom to more than 12 million barrels a day in 2019, is threatening to overwhelm demand. The U.S. has also given some nations temporary exemptions from the sanctions on Iran to prevent a market shock.
West Texas Intermediate for January delivery gained 36 cents to $51.51 a barrel at 11:17 a.m. on the New York Mercantile Exchange. Total volume traded was 22 percent above the 100-day average.
Brent for February settlement climbed 12 cents to $60.27 on London’s ICE Futures Europe exchange, after losing 1.4 percent earlier. The global benchmark crude traded at an $8.60 premium to WTI for the same month.
US crude inventories fell by 1.21 million barrels last week, Energy Information Administration data showed Wednesday, a fraction of the 10.2-million withdrawal cited in an industry report a day earlier.
Other oil-market news: Gasoline futures gained 1.5 percent to $1.4416 a barrel in New York trading. Oil’s tumble so far hasn’t affected the appetite of oil companies to do major projects, according to the oilfield equipment maker TechnipFMC Plc. U.S. President Donald Trump’s antitrust chief said the administration is still studying an anti-OPEC bill and that OPEC “implicates broader issues” of concern in addition to pure competition.