Oil prices fell on Wednesday as renewed concerns over global demand and high stock levels halted a rally that pushed up prices by about 19 percent over the past four sessions. The recent rebound was driven by hopes that prices may have hit a bottom after a seven-month rout slashed oil futures by nearly 60 percent and prompted major energy firms to cut spending on new production. But weak data from key consumer China has rekindled demand concerns, dragging on oil prices.
“A steady stream of news regarding falling capital expenditure from the industry and a drop in U.S. oil rigs in operation appears to be the spark,” ANZ analysts said. “While sentiment appears to have shifted, volatility will remain high.” Brent crude was 50 cents lower at $57.41 a barrel by 0336 GMT, after gaining almost 6 percent on Tuesday and off a near six-year low of $45.19 reached in mid-January.
U.S. crude was down 95 cents at $52.10 a barrel. The contract settled up 7 percent in the previous session, after trading at as high as $54.24 earlier in the day – more than $10 above than a near six-year low of $43.58 reached last week. Estimates by industry group American Petroleum Institute that U.S. crude stockpiles rose more than 6 million barrels last week also helped drive prices lower on Wednesday.