Nigeria oil. Picture: REUTERS/AKINTUNDE AKINLEYE
Nigeria oil. Picture: REUTERS/AKINTUNDE AKINLEYE

Singapore — Oil rebounded from several days of declining values after industry data showed a surprise drop in US crude inventories, offsetting weak economic readings in the US that have depressed global stock markets.

Brent crude rose 52c to $59.41 a barrel by 1.38am GMT, claiming back some of the ground lost over the past three sessions. US West Texas Intermediate crude was at $54.23 a barrel, up 61c.

Front-month WTI prices, as buyers emerge ahead of the $60.00 and $54.00 levels, settled down for the sixth straight session on Tuesday, their longest losing streak in 2019, after US manufacturing activity dived to a 10-year low as US-China trade tensions weighed on exports.

“Brent and WTI have erased those [Tuesday] losses in early trade respectively,” Jeffrey Halley, a senior market analyst at Oanda in Singapore said, though the trading volume is low because of regional holidays.

“We would expect the rallies to quickly run out of steam as we approach $61 and $55 a barrel.”

Oil pared some losses in post-settlement trade on Tuesday after American Petroleum Institute (API) data showed US crude stocks fell last week by 5.9-million barrels, against expectations for an increase of 1.6-million barrels.

The Energy Information Administration’s weekly oil inventories report is due at 2.30pm GMT on Wednesday.

Oil prices are now below levels from before the September 14 attacks on Saudi oil facilities as the world’s largest oil exporter has restored its full oil production and capacity.

“That means the market is not pricing in any risk premium from further potential attacks,” said Howie Lee, economist at Singapore’s OCBC bank.

Separately, Ecuador, one of the smallest members of the Organization of the Petroleum Exporting Countries (Opec), said on Tuesday it will leave the 14-nation bloc from January 1 due to financial problems. The South American oil producer will be the second to withdraw from Opec in the past year after the departure of Qatar.

Reuters