Oil prices on Wednesday diminished some of the previous day's drops over 6 percent, driven by an unexpected decline in crude oil reserves in the US, as well as by imports of crude fiber in India.
The oil pump socks appear next to a strawberry field in Oxnard, California, February 24, 2015. REUTERS / Lucy Nicholson
However, investors remained aside, with the International Energy Agency (IEA) warning of unprecedented uncertainty in the oil markets due to a difficult economic environment and political risk.
Brent LCOc1 crude oil futures were USD 63.19 per barrel at 0239 GMT, up 66 cents, or 1.1% since the last closing.
WTC's American WTC's CLC1 futures widened 66 cents or 1.2% to $ 54.09 a barrel.
Wednesday's earnings came after an American Petroleum Institute report late Tuesday that US crude oil reserves last week dropped unexpectedly by 1.5 million barrels to 439.2 million a week to 16 November.
The record of crude imports from India of about 5 million barrels per day (bpd) also supports prices, traders said.
However, Wednesday's bounce was small in the context of the general market failure, which showed a bad fall of more than 6% in the previous session amid the sale on global stock markets.
"The world economy is still in a very difficult time and very fragile," IEA chief Fatih Birol said on Tuesday.
"The growing fears of global growth have ruined the oil markets and seen European and American stocks slip," CMC Markets said in a note today.
With the deterioration in production and the worsening of the demand outlook, the Organization of Petroleum Exporting Countries (OPEC) is pushing for a reduction in supply between 1 and 1.4 million bpd to avoid a repeat of the 2014 buttock.
"We would have anticipated further weaknesses until the reaction of OPEC + (December 6) and the G20 Summit is clearer (November 30 / December 1)," said Ashley Kelty, an oil analyst at Cantor Fitzgerald Europe.
(GRAPHIC: The Brent crude oil curve is within the income limit (2R1kFDa)
Despite the expectations of the cuts that led to OPEC, Brent and WTI prices declined by 28 and 30% respectively from early October and the whole structure of the forward price curve changed.
The Brent Curve Forward <0#LCO:> was in a sharp delay in October, indicating a tight market with prices for immediate delivery higher than those for a later shipment. This makes it attractive for oil storage.
Since then, however, the curve has been converted to contango for most of 2019, which results in oversupply as higher prices further make it attractive to stock oil for later sale.
"Investors are increasingly worried that any potential production cut by OPEC will be insufficient to cover the surplus on the market," ANZ Bank said on Wednesday.
"The list of reasons for decline is very specific … excessive supply and the risk of slowing demand growth," said James Mick, Director of Energy Portfolios with US investment firm Tortoise.
"Part of the supply problem is increasing US production," he added.
C-OUT-T-EIA crude oil production in the United Kingdom rose nearly a quarter of this year, reaching 11.7 million bpd largely due to the increase in shale oil production.
(GRAPHIC: The fall in oil prices is driven by the US markets – tmsnrt.rs/2PHBCpL)
Report by Henning Gloystein. Editing by Joseph Radford and Richard Pullin