Crude oil prices bounced back on Wednesday from steep falls in the previous session as strong Japanese economic growth surprised markets and the consumer outlook in Australia seemed to brighten, stoking producer hopes of increased demand. Japan’s economy, the world’s third largest, expanded at an annualized rate of 2.4 percent in the first three months of this year, above a median market forecast for a 1.5 percent rise and following a revised 1.1 percent expansion in October-December, official data showed.
“Japan is one of the major importers of crude oil and growth in this region would definitely be favorable for crude demand,” Singapore-based brokerage Phillip Futures said. Brent futures LCOc1 rose as high as $64.75 a barrel in early trading before retreating to $64.40 at 0651 GMT, still up 38 cents. U.S. crude prices CLc1 were up 33 cents at $58.32 a barrel.
The price rises came after a session on Tuesday that saw oil slide over 3 percent on a dollar rally and concerns of a building glut, which Goldman Sachs said would lead to a return of 2015 lows. Japan’s weekly crude runs were at 3.02 million barrels per day for the week to May 16, official data showed Wednesday, up 0.12 percent from this time last year, although 0.17 percentage points below the previous week.