An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

Tokyo — Brent crude rose more than $1 on Thursday, recouping some ground after its biggest one-day drop in two years in the previous session on news that Libya would resume oil exports and US-China trade tension.

Brent crude rose $1.31, or 1.8%, to $74.71 by 2.42am GMT after slumping 6.9% on Wednesday.

US West Texas Intermediate (WTI) added 42c, or 0.6%, to $70.80, after falling 5% the previous session.

"Markets in Asia are a lot more settled today," said Greg McKenna, chief market strategist at AxiTrader in Sydney.

"Moves, the like of which we saw in Brent and to a lesser extent WTI, last night are often followed by some sort of bounce the following day or session," he said.

The announcement by Libya’s National Oil Corporation that four export terminals were being reopened, ending a standoff that had shut down most of Libya’s oil output, was one of the catalysts for a correction, analysts said.

The reopening allows the return of as much as 850,000 barrels a day of crude into international markets, while an escalating US-China trade row has raised concerns about demand.

Oil had some supportive news late on Wednesday that US crude oil stocks fell by nearly 13-million barrels last week, the most in nearly two years, dropping overall crude stocks to their lowest point since February 2015.

The decline in overall inventories was partially due to a fall-off in stocks at the Cushing, Oklahoma, delivery hub for US crude futures, which were down by 2.1-million barrels.

"For WTI, there is tightness at Cushing, which will be supportive over July and August," said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.

Supply to the US market has also been squeezed by the loss of some Canadian oil production.