Crude oil prices rebounded a bit on Wednesday, after having plunged sharply in the previous session amid concerns over weakening demand and on Saudi Arabia’s reassurance that it would increase output to offset loss of Iranian oil post U.S. sanctions from early November.
Oil prices edged higher today despite U.S. Energy Information Administration’s report that U.S. crude inventories rose for a fifth straight week.
Crude oil futures for December settled at $66.82 a barrel, gaining $0.39, or 0.6% for the session.
On Tuesday, crude oil futures ended down $2.93, or 4.2%, at $66.43 a barrel, the lowest settlement since August 20.
The EIA report said crude inventories in the U.S. rose by 6.35 million barrels in the week to October 19, exceeding analysts’ forecasts by a significant margin.
The EIA report also showed that gasoline inventories fell by 4.83 million barrels, and this aided oil’s uptick. Distillate stockpiles decreased by 2.26 million barrels in the week.
On Tuesday, a report from the American Petroleum Institute showed U.S. crude stocks had risen by 9.88 million barrels in the week ended October 19, compared with a draw of 2.13 million barrels in the previous week.
Oil prices were sliding in recent sessions amid speculation that demand will slowdown due to the adverse impact of the ongoing U.S.-China trade war on the global economy. Traders were also reacting to Saudi Arabia’s assurance that it would make up for the loss of Iranian oil, by playing a ‘responsible role’ in the market.
Saudi Arabia’s Oil Minister Khalid al-Falih recently said that the kingdom has no intention of an oil embargo on Western consumers, despite the current crisis following allegations that it murdered journalist Jamal Khashoggi. The minister added that Saudi Arabia would work to increase supply.