U.S. crude stocks dropped for a sixth consecutive week, dropping by 3.7 million barrels to 429.3 million barrels last week
Oil prices gained more than 2% on Wednesday, bouncing back from multi-month lows, after data showed a bigger-than-expected draw in U.S. crude stockpiles, even as concerns about weak oil demand in China persisted.
Brent crude futures settled up $1.85, or 2.42%, at $78.33 a barrel. U.S. WTI crude added $2.03, or 2.77%, to $75.23.
U.S. crude stocks dropped for a sixth consecutive week, dropping by 3.7 million barrels to 429.3 million barrels last week, according to government data.
The story here really is that demand is stronger than people thought and overall supplies are tighter, according to Phil Flynn, an analyst at Price Futures Group. Crude supply is below average for this time of year.
Industry data from the American Petroleum Institute (API) on Tuesday had shown an unexpected build in crude and gasoline inventories.
On Monday, Brent plunged to its lowest since early January and West Texas Intermediate hit its lowest since February, as a global stock market rout deepened on concerns about a potential recession in the U.S. following weak jobs data.
Both oil benchmarks broke a three-session declining streak on Tuesday.
The recovery we have gotten from the large downturn on Monday shows it was a very short-lived temper tantrum and not a market crash, according to Tim Snyder, chief economist at Matador Economics.
Lower production at Libya’s 300,000 barrel per day (bpd) Sharara oilfield is also adding to worries about supply shortages.
Libya’s National Oil Corp declared force majeure in its Sharara oilfield from August 7, the firm said on Wednesday. NOC had said on Tuesday it would start to gradually reduce production at the field due to protests.
