Oil prices rebounded in Asian trade on Thursday after falling to this year’s low in the previous session, but concerns about economic slowdown weakening fuel demand limit earnings.
Brent crude futures as of 05.00 GMT rose 70 cents, or 0.9%, to $77.87 a barrel, while West Texas Intermediate (WTI) crude futures rose 74 cents, or 1.0%, to $72.75 a barrel.
Brent had settled on Wednesday below the year’s previous closing low touched on the first day of 2022, while U.S. West Texas Intermediate crude had fallen to a fresh yearly low.
There may be attempts to stabilize prices after the large-scale sharp sell-off, but it is possible that the generally cautious market will continue.
Positive catalysts such as supply-demand imbalance and China’s reopening hopes will be short-lived, while concerns about demand will continue to be a significant pressure on oil prices.
U.S. crude oil production rose to 12.2 million barrels a day last week, the highest level since August, the Energy Information Administration (EIA) said on Wednesday.
While US crude inventories fell last week, rising gasoline and distillate inventories added to concerns about easing demand.
The EIA said gasoline inventories increased by 5.3 million barrels per week to 219.1 million barrels, while distillate stocks, including diesel and heating oil, increased by 6.2 million barrels.
Data showing that Japan’s economy contracted less than originally anticipated in the third quarter helped boost oil prices.
The relaxation of COVID-19 restrictions in China, which is among the world’s largest consumers of crude oil, also helped stabilize oil prices.
Meanwhile, after the G7 and the European Union imposed new restrictions on Russian oil exports on December 5, Western officials are in talks with Turkish officials to resolve oil tanker queues off the Turkish straits.
At least 20 oil tankers continue to face delays crossing into the Mediterranean from Russia’s Black Sea ports as operators race to comply with Turkish rules.
