Oil prices rebound after falling below $30
Investors have an eye on the release later in the day of US commercial crude stockpiles data, which is expected to show another increase, further exacerbating a global supply glut that has hammered the market for 18 months.
US benchmark West Texas Intermediate (WTI) for delivery in February rose 26 cents, or 0.85 percent, to $30.70 per barrel at around 0330 GMT. European benchmark Brent rose 10 cents, or 0.32 percent, to $30.96.
On Tuesday, WTI fell at one point to $29.93, a level last seen in December 2003, although they were given a lift later by a private report pointing to a drop in inventories.
However, experts warned that prices remained fragile.
“The supply and demand landscape for oil continues being bearish as prices continue to take discounts,” Daniel Ang, an analyst with Phillip Futures in Singapore said in a market commentary.
“US oil supply continues to remain strong despite reports of US shale production being one of the higher end from a cost perspective.”
Bernard Aw, a market strategist with IG Markets Singapore said, that if the market continues to test the $30 price level, “it is possible that the mark might eventually break”.
He said the long-term trend is for prices to fall, with the supply glut not showing any let up.
Oil-reliant OPEC member Nigeria on Tuesday called for an emergency meeting of the cartel to address collapsing prices, which have rattled world stock markets and hammered energy firms.
The Nigerian petroleum resources minister, Emmanuel Ibe Kachikwu, said he expects an extraordinary meeting of the group in “early March” to discuss the crisis.
“We did say that if it hits the $35 (per barrel level), we will begin to look (at)… an extraordinary meeting,” Kachikwu said at the Gulf Intelligence UAE Energy Forum.
Poorer members of the Organization of the Petroleum Exporting Countries have been clamouring for the cartel to cut high production levels in a bid to drive prices higher.
But OPEC’s influential members led by Saudi Arabia have rejected any such move, preferring to fight for market share against rival producers, particularly the United States.
Crude accounts for 90 percent of Nigeria’s export earnings and 70 percent of overall government revenue.