SINGAPORE: Oil prices rebounded in Asia on Friday after tanking nearly five percent the day before on fresh worries about an oversupply, while traders await the release of key US jobs data.
The commodity plunged Thursday in response to official figures showing US commercial inventories fell less than expected last week, indicating softer demand in the world’s top oil consumer as the crucial driving season kicks in.
The data added to an already downbeat mood on markets as investors worry about the longer-term fallout from Britain’s vote to leave the European Union.
At about 6:50 a.m. local time the US benchmark West Texas Intermediate was up 26 cents, or 0.58 percent, at $45.40 and Brent gained 32 cents, or 0.69 percent, to $46.72.
WTI plunged 4.8 percent and Brent sank 4.9 percent on Thursday after the US Department of Energy (DoE) reported stockpiles fell 2.2 million barrels in the week ending July 1. The market was expecting a 2.5 million barrel drop, according to Bloomberg News.Both contracts are more than 6 percent lower down from last Friday.
The DoE also reported a much smaller than expected decline in petrol stockpiles during
the peak summer driving season when Americans take to the road for their holidays. Gasoline stockpiles fell 100,000 barrels, well below the forecast 350,000.
IG Markets analyst Bernard Aw said traders were looking for bargains after Thursday’s “substantial drop” in prices, but added the oversupply concerns will linger.
“What’s even more important was the lack of decline in the gasoline inventories, given that the summer driving season in the US still has two more months to go,” Aw said.
“Traders now fear that we could see a worsening of the supply overhang when summer is over.”
Prices were also given some support after a militant group in Nigeria, Africa’s biggest oil producer, said it attacked more oil infrastructure in the country’s south, ignoring a call for unity from President Muhammadu Buhari.