Oil rebounded from several days of decreasing prices. The industry data showed a surprise drop in U.S crude inventories offsetting weak economic reading in the U.S. This made global stock markets depressed.
Brent crude rose 43 cents, or 0.7%, to $59.32 a barrel getting back some of the loss over the past three sessions. The U.S. West Texas Intermediate crude was at $54.23 a barrel, up 61 cents or 1.1%.
Also, on Tuesday, WTI prices settled down for a sixth straight session, it’s their longest losing streak this year. The U.S manufacturing activity plunged to a 10-year low as U.S.-China trade tension weighed on exports.
OANDA’s senior market analyst says Brent and WTI erased those losses in early trade respectively. The trading volume was low because of regional holidays.
Moreover, Jeffrey added they expect the rallies to quickly run out of steam as they approach $61.00 and $55.00 a barrel.
On Tuesday, American Petroleum Institute data showed U.S crude stocks fell last week by 5.9million barrels. As a result, oil pared some losses in post-settlement trade. Also, their expected increase was 1.6 million barrels.
The Energy Information Administration’s weekly oil inventory report is due on Wednesday.
As Saudi Arabia restored its full oil production and capacity, oil prices are now below levels from before the attacks.
Furthermore, economist Howie Lee said the market is not pricing in any risk premium from further potential attacks.
One of the smallest members of the OPEC, Ecuador said it would leave the 14-nation bloc from Jan. 1 due to fiscal problems. After the departure of Qatar, the South American oil producer will be the second to withdraw from OPEC in the last year.
Oil Down for 6th Day
Oil bulls give little comfort these days, whether in macro data or barrel count. The latest blow to those long crude Monday was a weaker-than-expected survey of U.S manufacturing. It echoes similarly bleak surveys from around the world.
U.S WTI crude settled down 25 cents, or 0.8%, at $53.62 per barrel. Also, U.K Brent oil settled down 36 cents, or 0.6%, at $58.89.
Besides, crude oil is not only back to the range of August but also back near the lows of the field.
Since the last settlement higher on Sept. 23, the market has fallen without pause. It lost 9% in that stretch.
Moreover, The Institute of Supply Management’s manufacturing PMI posted its lowest reading in 10 years. It falls to 47.8 in September and disappoints consensus forecasts of a rebound above 50.
The U.S.-China trade war, Brexit, and other concerns still make Japan suffer. Also, similar surveys to the eurozone and U.K. also painted a picture of a global manufacturing sector.
Even data from the U.S. Energy Information Administration has been working against oil bulls lately.
Also, on Monday, the EIA released its July tally for oil products. It shows demand picked up by 0.3% or 60,000 barrels per day.
Gasoline sale was down 1.6% year on year and distillates fell -1.4%. The rest of the demand growth came from less visible products such as LPG, fuel oil, asphalt, or petroleum coke. Also, jet fuel demand was stronger. For July since 2015, the demand for gasoline was at the lowest level.