SINGAPORE (Reuters) – Oil rebounded from several days of declining values after industry data showed a surprise drop in U.S. crude inventories, offsetting weak economic readings in the United States that have depressed global stock markets.
Brent crude rose 52 cents to $59.41 a barrel by 0138 GMT, claiming back some of the ground lost over the past three sessions. U.S. West Texas Intermediate crude was at $54.23 a barrel, up 61 cents.
Front-month WTI prices settled down for the sixth straight session on Tuesday, their longest losing streak this year, after U.S. manufacturing activity dived to a 10-year low as U.S.-China trade tensions weighed on exports.
“Brent and WTI have erased those (Tuesday) losses in early trade respectively,” Jeffrey Halley, a senior market analyst at OANDA in Singapore said, although the trading volume is low because of regional holidays.
“We would expect the rallies to quickly run out of steam as we approach $61.00 and $ 55.00 a barrel.”
Oil pared some losses in post-settlement trade on Tuesday after American Petroleum Institute (API) data showed U.S. crude stocks fell last week by 5.9 million barrels, against expectations for an increase of 1.6 million barrels.
The Energy Information Administration’s weekly oil inventories report is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.
Oil prices are now below levels from before the Sept. 14 attacks on Saudi oil facilities as the world’s largest oil exporter has restored its full oil production and capacity.
“That means the market is not pricing in any risk premium from further potential attacks,” said Howie Lee, economist at Singapore’s OCBC bank.
Separately, Ecuador, one of the smallest members of the Organization of the Petroleum Exporting Countries (OPEC), said on Tuesday it will leave the 14-nation bloc from Jan. 1 due to fiscal problems. The South American oil producer will be the second to withdraw from OPEC in the last year after the departure of Qatar.
(This story he been refilled to remove extraneous words in paragraph 3)
Reporting by Florence Tan; Editing by Tom Hogue
Our Standards:The Thomson Reuters Trust Principles.