Oil rebounds on Asia optimism
Oil rebounded from the lowest level in almost four months on speculation the biggest decline this year was exaggerated amid signs of increased demand in Asia.
Futures climbed as much as 0.7 per cent in New York.
Prices slumped 4.8 per cent on Wednesday after US oil stockpiles rose and on concern President Barack Obama faces a showdown with the Republican-controlled House over more than $US600 billion in tax increases and spending cuts.
China, the world’s second-biggest crude user after the US, may boost demand the most in two years this quarter, according to Sanford C. Bernstein & Co and the International Energy Agency.
‘‘It’s probably a bit of a balancing act between the demand that we’ve seen coming out of the US and Europe and the demand growth we’ve seen over time in Asia,’’ said David Lennox, a resource analyst at Fat Prophets in Sydney.
‘‘We saw the inventory numbers coming out of the US and they certainly weren’t flash.’’
West Texas Intermediate oil for December rose as much as 56 cents to $US85 a barrel in electronic trading on the New York Mercantile Exchange and was at $US84.83 at 10.54am in Tokyo.
Crude slumped $US4.27 on Wednesday to $US84.44, its lowest close since July 10. Prices have fallen 14 per cent this year.
Brent for December settlement advanced 41 cents to $US107.23 a barrel on the ICE Futures Europe exchange. It slid $US4.25, or 3.8 per cent, to $US106.82 on Wednesday.
The European benchmark crude was at a premium of $US22.40 to New York-traded WTI.
Crude in New York is rebounding after reaching technical support along the lower Bollinger Band on the daily chart, according to data compiled by Bloomberg.
Futures have pared losses after reaching this indicator, at $US83.21 a barrel on today, for the past two weeks. Buy orders tend to be clustered near chart-support levels.
China’s apparent oil demand, or domestic production plus net imports, will jump at least 400,000 barrels a day in the three months ending December 31 from the previous quarter, according to the IEA and Bernstein.
The increase would be the biggest since the final quarter of 2010 and compares with estimated net global growth of 290,000, IEA data show.
US crude supplies increased 1.77 million barrels to 374.8 million barrels last week, the Energy Department said yesterday.
Stockpiles were forecast to gain 2 million barrels, according to the median of 11 analyst estimates in a Bloomberg survey.
Gasoline stockpiles rose 2.88 million barrels to 202.4 million, the highest level since the week ended August 17, the report showed.
Inventories of distillate fuel, a category that includes diesel and heating oil, increased 131,000 barrels to 118.1 million, the first gain in eight weeks.