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Oil Rebounds From Near 2017 Lows

Oil Rebounds From Near 2017 LowsOil Rebounds From Near 2017 Lows

Oil prices rebounded from near 2017 lows on Wednesday after preliminary data showed a much higher-than-expected fall in US crude stocks, reviving bullish sentiment about easing oversupply.

Benchmark Brent crude was up 37 cents at $50.83 a barrel.

On Tuesday the futures had settled at their lowest since Nov. 30, when the Organization of Petroleum Exporting Countries decided to cut oil supply, CNBC reported.

US West Texas Intermediate crude traded at $47.96 a barrel, up 30 cents. WTI had slid 2.4% on Tuesday on concerns about falling OPEC compliance with its production-curbing deal.

Data from the American Petroleum Institute (API) assessing closely watched US oil inventories showed late on Tuesday that crude stocks had fallen last week by 4.2 million barrels, nearly double the drop expected by analysts polled by Reuters.

"The API statistics are helping the market recover, but the underlying sentiment is still bearish," said Tamas Varga, analyst at London brokerage PVM Oil Associates.

The US government was expected to release official inventory data from the Energy Information Administration on Wednesday.

Russia, contributing the largest production cut outside OPEC, said on Wednesday that as of May 1, it had curbed output by more than 300,000 bpd since October.

This means Russia has achieved its reduction target a month ahead of schedule, just as the latest Reuters survey of OPEC production showed compliance had fallen slightly.

Oil investors continue to eye producing countries' compliance with their pledge made in late 2016 to cut production by around 1.8 million barrels per day by the middle of the year.

 

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