Vienna, Austria (BBN) – Crude staged a rebound in Asia on Tuesday after a sharp overnight fall on dollar gains and concerns about the supply response to coordinated global oil cuts by OPEC and non-OPEC nations ahead of industry estimates on US inventories.
Crude oil for March delivery on the New York Mercantile Exchange rose 0.25 per cent to $53.13 a barrel, while Brent oil for April delivery on the ICE Futures Exchange in London edged up 0.07 per cent to $55.90 a barrel, reports
On Tuesday afternoon, the American Petroleum Institute will release its estimates of US crude and refined product stockpiles.
The figures are followed on Wednesday by official data from the US Energy Information Administration.
Analysts expect a crude build of 2.38 million barrels at the end of last week.
Also this week, the Paris-based International Energy Agency update monthly demand and supply figures.
Overnight, oil prices were modestly lower during North American morning hours on Monday, reversing earlier gains as prospects of rising US production weighed on the market.
News that the US imposed fresh sanctions on some Iranian individuals and entities, days after the White House put Tehran “on notice” over a ballistic missile test, supported gains.
Global benchmark Brent crude futures settled down 1.92 per cent to $55.72 a barrel on London’s Intercontinental Exchange, while New York Mercantile Exchange, crude oil for delivery in March fell 1.52 per cent to $53.01 a barrel.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the US increased by 17 last week, the 13th gain in 14 weeks.
That brought the total count to 583, the most since November 2015.
The data raised concerns that the ongoing rebound in US shale production could derail efforts by other major producers to rebalance global oil supply and demand.
Futures have been trading in a narrow range around the mid-$50s over the past month as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in US shale production.
OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade as global producers look to reduce oversupply and support prices.
January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months.
The deal, if carried out as planned, should reduce global supply by about 2 per cent.