The commodity plunged yesterday in response to official figures showing US commercial inventories fell less than expected last week, indicating softer demand in the world's top oil consumer as the country's crucial driving season kicks in.
Oil prices rebounded in Asia today after tanking nearly five per cent the day before on fresh worries about an oversupply, while traders await the release of key US jobs data.
The commodity plunged yesterday in response to official figures showing US commercial inventories fell less than expected last week, indicating softer demand in the world’s top oil consumer as the country’s crucial driving season kicks in.
The data added to an already downbeat mood on markets as investors worry about the longer-term fallout from Britain’s vote to leave the European Union.
At around 0335 GMT the US benchmark West Texas Intermediate rose 50 cents, or 1.11 per cent, to $ 45.64 and Brent gained 60 cents, or 1.29 per cent, to $ 47.00.
WTI plunged 4.8 per cent and Brent sank 4.9 per cent yesterday after the US Department of Energy (DoE) reported stockpiles fell 2.2 million barrels in the week ending July 1. The market was expecting a 2.5 million barrel drop, according to Bloomberg News.
Both contracts are more than six percent lower down from last Friday.
The DoE also reported a much smaller than expected decline in gasoline stockpiles during the peak summer holiday driving season when Americans take to the road for their holidays. Gasoline stockpiles fell by 100,000 barrels, well below the forecast 350,000.
IG Markets analyst Bernard Aw said traders were looking for bargains after Thursday’s “substantial drop” in prices, but added the oversupply concerns will linger.
“What’s even more important was the lack of decline in the gasoline inventories, given that the summer driving season in the US still has two more months to go,” Aw said.
“Traders now fear that we could see a worsening of the supply overhang when summer is over.”
Prices were also given some support after a militant group in Nigeria, Africa’s biggest oil producer, said it attacked more oil infrastructure in the country’s south, ignoring a call for unity from President Muhammadu Buhari.