Crude futures bounced back from two-month lows on Tuesday, helped by a weaker dollar, but an oil stocks overhang and a drop in bullish bets by investors weighed on prices.
Brent crude was at $47.36 per barrel at 1022 GMT, up $1.11 or 2.3 percent. U.S. West Texas Intermediate crude was up 87 cents at $45.63 a barrel.
Saudi Energy Minister Khalid al-Falih said on Tuesday the oil industry needed a price above $50 per barrel to sustain investments but added that downward pressure would prevail because of an inventory glut.
“We need a price higher than $50 to achieve balance in oil markets in the long term,” Falih told German business daily Handelsblatt.
“But there are still excess stocks on the market – hundreds of millions of barrels of surplus oil. It will take a long time to reduce this inventory overhang,” he added.
Oil prices fell to a two-month low on Monday on renewed fears of oversupply.
On Tuesday, commodity and stock prices rose as the dollar index dropped 0.4 percent. The UK pound bounced back from a 31-year low amid easing political tensions in Britain and as hopes for stimulus measures boosted risk appetite.
A brief suspension of tanker loading in Iraq and conflicting reports of new attacks in Nigeria also bolstered prices.
On the downside, a Reuters poll showed that China’s economic growth likely cooled to a seven-year low in the second quarter as the industrial sector lost steam and a boost from financial services faded.
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