Brent Crude Rebounds

Brent Crude ReboundsBrent Crude Rebounds

Brent crude rebounded after two days of declines that sent it to the lowest in more than a week.

Futures advanced as much as 1.6% in London. China’s imports dropped to 26.59 million tons in August, down 13% from a record the previous month, according to preliminary customs data, Bloomberg reported.

Mexico “expressed readiness” to cooperate with OPEC after a meeting in Tehran, Iran’s Oil Minister Bijan Namdar Zanganeh said.

Oil has fluctuated since falling below $45 a barrel two weeks ago as concern over China’s slowing demand fueled volatility in global markets. Prices are down more than 25% from this year’s closing peak in May amid signs the world’s oversupply will persist.

The International Energy Agency, a Paris-based adviser to industrialized nations, will publish its monthly report on global oil supply and demand on September 11.

Brent for October settlement climbed as much as 78 cents to $48.41 a barrel on the London-based ICE Futures Europe exchange and was at $48.05. The contract lost $1.98 to $47.63 on Monday, the lowest close since August 27. Prices are down 16% this year.

West Texas Intermediate for October delivery fell $1.27, or 2.8%, from the September 4 closing price to $44.78 a barrel on the New York Mercantile Exchange.

China’s overseas purchases of oil in August dropped for the first time in three months, as slowing fuel demand in the country curbed oil requirements and its refineries cut processing.

The nation’s apparent oil demand fell to the lowest level in nine months in July to about 10.15 million barrels a day, according to data compiled by Bloomberg.

Oil prices have fallen almost 60% since June 2014 on a global supply glut driven by near-record pumping from OPEC and US oil producers.

Despite calls from some OPEC members for cuts to the group's output, Saudi Arabian crude production is likely to stay around current levels in the fourth quarter of this year as a decline in domestic crude burning for power generation is expected to be offset by a seasonal rise in global demand.

Morgan Stanley analyst Adam Longson said oil prices should remain range-bound and low well into 2016 before starting to recover.

"New supply from Iran in (the first half of 2016) should keep the market oversupplied," Longson said.