Oil prices rebound from their six-month lows in early trade

7 Dec 2023 , 10:02 AM

Following a decline in the previous session due to rising U.S. crude output and petrol inventories, oil prices recovered some of their losses in early Asian trading but continued to remain at their lowest levels since June.

Brent crude futures had increased by 32 cents, or 0.43%, to $74.62 per barrel. The price of a barrel of U.S. West Texas Intermediate crude futures increased by 33 cents, or 0.48%.

According to analysts at ANZ, data indicating that U.S. output is still close to record highs despite declining stockpiles ‘spooked’ the market during the previous session.

The ANZ analysts said that increased product fuel stockpiles contributed to part of the pessimism.

The EIA reported on Wednesday that petrol supplies increased by 5.4 million barrels over the week to 223.6 million barrels, far above projections of a build of one million barrels.

As members of the Organisation of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman met on Wednesday to discuss further cooperation in oil prices. This meeting may boost the market’s confidence in the impact of output cuts.

OPEC+ announced voluntary output cutbacks last week, but there were doubts about whether the reductions would be properly implemented, which caused prices to drop by 2%.

Prices fell on Wednesday due in part to worries about China’s economy, and the market will be observing the release of China’s trade data later on Thursday.

China’s export figures for October were worse than anticipated; since May, the country’s exports have decreased annually every month.

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