Crude oil prices bounced on Thursday following losses earlier in the week, with Chinese stocks picking up after the government put in place new efforts to stop a rout that had knocked off a third of the country’s share market value. Front-month U.S. crude futures and internationally traded Brent contracts were both up around half a dollar at 0243 GMT, at $52.13 and 57.54 per barrel respectively.
China’s securities regulator took the drastic step late on Wednesday of ordering shareholders with stakes of more than 5 percent from selling shares for the next six months in a bid to halt a plunge in stock prices that is starting to roil global financial markets. The police are also investigating clues pointing to potentially “malicious” short-selling of Chinese shares, state news agency Xinhua said on Thursday.
But analysts said the oil market remained under pressure and that big gains were unlikely. “Oil is being pressured on multiple fronts, and China’s equity wobble, the prospect of Iran’s re-entry to the market and low liquidity all add up to an extremely fraught environment. Oil needs to establish a new range and we would see the WTI crude low around $50 with the upside capped at $58,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.