- Market pares losses after big drop
- Largest one-day fall for Brent in two years on Wednesday
- Resumption of Libya oil exports to boost supply
- Concerns U.S.-China trade tensions will curb demand
Oil prices rallied on Thursday, recouping some ground following sharp losses the previous session after Libya said it would resume oil exports.
Benchmark Brent crude oil rose $1.37, or almost 1.9 percent, to a high of $74.77 a barrel before easing back to trade around $74.50 by 0820 GMT. On Wednesday, Brent had slumped $5.46 or 6.9 percent.
U.S. light crude gained 25 cents to $70.63 a barrel, after falling 5 percent the previous session.
“The market fell out of bed yesterday as support failed (but was)… probably overdone to the downside,” said Robin Bieber, technical analyst at London brokerage PVM Oil Associates. “Sharp attempts to recover are to be expected.”
An announcement by Libya’s National Oil Corp that four oil export terminals were reopening, ending a standoff that had shut down most of Libya’s oil output, was a key catalyst for the price fall on Wednesday, analysts said.
The reopening will allow the return of up to 850,000 barrels per day of high quality crude oil to international markets.
An escalating U.S.-China trade row also helped depress oil prices as it raised the prospect of faltering global growth and lower energy consumption, particularly in emerging markets.
Oil had some supportive news late on Wednesday that U.S. 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 U.S. inventories was partially due to a fall in stocks at the Cushing, Oklahoma delivery hub for U.S. crude futures, which dropped 2.1 million barrels.
“For WTI (U.S. light crude) 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 U.S. market has also been squeezed by the loss of some Canadian oil production.