Oil prices bounced back in Asia Thursday as investors weighed a rise in US crude inventories and production against a forecast by OPEC’s chief of rising demand.
US benchmark West Texas Intermediate for November delivery climbed nine cents to $47.90 and Brent crude for November gained eight cents to $51.41 in afternoon trade.
Prices tumbled Wednesday after a US Department of Energy report showed commercial crude stockpiles rose more than expected in the week ending October 2, indicating softer demand in the world’s top oil consuming nation.
Stockpiles rose by 3.1 million barrels, more than the market estimate of 2.25 million barrels. That brought inventories to 461.0 million barrels, more than 27 percent higher than a year ago.
US production, which had fallen by 40,000 barrels per day in the previous week, unexpectedly surged by 76,000 barrels per day, dousing hopes of an easing in the global crude oversupply.
Traders, however, were also weighing remarks by Abdalla Salem El-Badri, secretary-general of the Organization of the Petroleum Exporting Countries, that demand will rise more than projected this year.
“World oil demand is estimated to increase by 1.5 million barrels per day in 2015, higher than the initial projection,” El-Badri said in a statement to the International Monetary Fund (IMF).
“In 2016, improvement in global economic activities is anticipated to support world oil demand to grow by 1.3 million barrels per day.”
Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at professional services firm EY, said the market is waiting for the release Friday of minutes of the last meeting of the Federal Reserve for further clues on the health of the US economy after last week’s disappointing employment data.