After falling to 2-month lows a couple of sessions ago, crude oil prices edged higher on Thursday, extending previous session’s modest rise, thanks to a rebound in stock markets and on OPEC’s signal that it might cut oil production again.
According to Reuters, Saudi OPEC governor Adeeb Al-Aama said the oil market could shift into oversupply in the last quarter of the year and that OPEC may have to return to oil production cuts.
Only recently, Saudi Arabia’s Oil Minister Khalid al-Falih had 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.
Data released by the U.S. Energy Information Administration on Wednesday showed crude oil inventories in the U.S. rose for the fifth successive week, as stockpiles rose by 6.35 million barrels in the week to October 19, exceeding analysts’ forecasts by a significant margin.
Crude oil futures for December ended up $0.51, or 0.8%, at $67.33 a barrel. On Wednesday, crude oil futures closed higher by $0.39, or 0.6%, at $66.82 a barrel, after having plunged to a two-month low a session earlier.
Oil’s uptick yesterday was supported by the EIA report, which said gasoline inventories fell by 4.83 million barrels. Distillate stockpiles decreased by 2.26 million barrels in the week.
Oil prices were sliding down, and quite sharply at times, 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 and on geopolitical concerns. 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.