Oil prices rebound in Asia
US benchmark West Texas Intermediate (WTI) rose 13 cents to $47.18 and Brent climbed 16 cents to $57.24 in afternoon trade.
WTI sank $1.12 in New York and Brent tumbled 46 cents in London on Thursday after a government report showed surging US stockpiles, adding to a global oversupply.
The US Department of Energy on Wednesday said inventories hit a fresh record high of 448.9 million barrels last week, while stockpiles at the Cushing terminal hub in Oklahoma — the price settlement point for WTI — also increased.
Bloomberg News reported the United Steelworkers union representing 30,000 US oil workers had reached a tentative deal on a four-year contract with Royal Dutch Shell that could see a mass walkout brought to a close.
“With the strike coming to an end, I expect the premium of Brent crude over WTI to narrow,” Daniel Ang, an investment analyst with Phillip Futures in Singapore, told AFP.
Another development affecting the market was an announcement on Monday by the US Energy Information Administration raising its crude production forecast this year to 9.35 million barrels per day from 9.30 million.
“This suggests that oil prices will probably stay low for the rest of the year,” Ang added.
Crude prices fell 60 percent to about $40 between June and late January owing to an oversupply in world markets, a weak global economy and the strong dollar.
Prices have since rebounded following a slowdown in US oil-drilling activities, but analysts say they are unlikely to return to their peaks.
“Oil prices should recover gradually in the coming years but ample supply should keep them well below $100 per barrel for the foreseeable future,” research house Capital Economics said in a market commentary. (AFP)