Brent crude rebounded after dipping below $50 a barrel for the first time since May 2009 amid signs of a continuing supply surplus. Benchmark U.S. oil futures surged in New York.
Futures in London advanced as much as 1.5 percent while West Texas Intermediate gained as much as 2.9 percent. U.S. crude stockpiles probably rose by 700,000 barrels last week while gasoline inventories advanced 4.5 million, a Bloomberg survey showed before an Energy Information Administration report today. The American Petroleum Institute reportedly said yesterday that crude supplies slipped as fuel stockpiles surged in the week ended Jan. 2.
“We’ve seen the market try to stabilize after making new lows, and that appears to be what’s happening now,” Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut, said by phone. “I still don’t think we’ve seen the bottom. The API fuel numbers yesterday point to weak market fundamentals.”
Crude slumped by 48 percent last year, the most since the 2008 financial crisis, as the U.S. pumped at the fastest pace in more than three decades and the Organization of Petroleum Exporting Countries decided to maintain its output ceiling. The oversupply may take “months or years” to be absorbed, United Arab Emirates Energy Minister Suhail Al Mazrouei said.