Crude oil rebounded on speculation that a slide in prices to a five-year low was excessive.
Brent, the benchmark for half the world’s oil, gained as much as 5.8 percent after closing at the lowest level since May 2009 yesterday. West Texas Intermediate crude jumped as much as 5.5 percent. Prices slipped earlier after Russia reiterated it will keep production steady and the U.S. Energy Information Administration reported a supply increase at Cushing, Oklahoma.
“We are now finally reaching a point where the market isn’t going completely straight down anymore,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $2.4 billion. “It probably has much less to do with fundamentals and a lot more to do with traders positioning.”
WTI for January delivery rose $2.51, or 4.5 percent, to $58.44 a barrel at 12:15 p.m. on the New York Mercantile Exchange. Prices dropped to $53.60 yesterday, the lowest since May 2009. Total volume traded was 83 percent above the 100-day average for the time of day.
Brent for February settlement gained $3.16, or 5.3 percent, to $63.17 a barrel on the London-based ICE Futures Europe exchange with volume 3.7 percent above the 100-day average. The January contract expired yesterday at $59.86, the lowest settlement since May 2009. Brent traded $4.25 above WTI on the ICE.