Brent oil gains $1 to claw back some losses as Libyan exports to resume
Brent crude rose more than $1 on Thursday, recouping some ground after its biggest one-day drop in two years during the previous session after Libya said it would resume oil exports and U.S.-China trade tensions raised demand concerns.
Brent crude LCOc1 rose $1.23, or 1.7 percent, to $74.63 a barrel by 0544 GMT after slumping 6.9 percent on Wednesday.
U.S. West Texas Intermediate (WTI) CLc1 added 46 cents, or 0.7 percent, to $70.84 a barrel, after falling 5 percent the previous session.
“Markets in Asia are a lot more settled today,” said Greg McKenna, chief market strategist at AxiTrader in Sydney.
“Moves, the like of which we saw in Brent and to a lesser extent WTI last night, are often followed by some sort of bounce the following day or session,” he said.
The announcement by Libya’s National Oil Corp that four export terminals were being reopened, ending a standoff that had shut down most of Libya’s oil output, was one of the catalysts for a correction, analysts said.
The reopening allows the return of as much as 850,000 barrels per day of crude into international markets, while an escalating U.S.-China trade row has raised concerns about demand.
Oil had some supportive news late on Wednesday that U.S. crude oil stocks fell by nearly 13 million barrels last week, the most in nearly two years, dropping overall crude stocks to their lowest point since February 2015.
The decline in overall inventories was partially due to a fall-off in stocks at the Cushing, Oklahoma, delivery hub USOICC=ECI for U.S. crude futures, which were down by 2.1 million barrels.
“For WTI there is tightness at Cushing, which will be supportive over July and August,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.
Supply to the U.S. market has also been squeezed by the loss of some Canadian oil production.