Oil Prices Rebound
Oil prices rose for the first time in three days on Wednesday, following the news of Saudi supply cuts to Asia, but persistent doubt over output reductions and signs of rising shipments from other producers have kept gains in check.
Brent crude futures were up 52 cents at $54.16 a barrel, while US West Texas Intermediate crude futures were up 44 cents at $51.26 a barrel, Reuters reported.
Brent has surrendered nearly 40% of the gains made between late November and early January. Analysts, however, said the slide was unlikely to become more aggressive, given the likelihood of Saudi Arabia and other Persian Gulf producers at least sticking to their pledge to cut output.
“Few envision that Brent crude at sub-$50 a barrel is a viable price (in H1, or the first half of 2017) amid OPEC production cuts tightening up the market,” SEB commodities strategist Bjarne Schieldrop said.
“If (Tuesday’s) low of $53.58/barrel turns out to be the low point remains to be seen. However, we do think that buying in the territory between the current price of $53.88/b and down to $50/b is probably as good as it gets for buyers in H1.”
Saudi Arabia, the world’s top oil exporter, has told some of its Asian customers that it will reduce their crude supplies slightly in February.