Oil prices rebound from mufti-month lows to trade higher on signs of growing crude demand, but continued concerns over the global oversupply are expected to keep a lid on the growth.
Light sweet crude for September delivery most recently added 88 cents or 2.01% to trade at $44.75 a barrel on the New York Mercantile Exchange. The US benchmark had earlier fallen to intraday lows of about $43.69 a barrel.
Brent futures, the global benchmark, most recently jumped by $1.45 or 2.98% t trade at $50.06 a barrel.
Oil field data services provider Genscape Inc told its clients that inventories at Cushing Okla., an important storage and delivery point for the US benchmark Nymex contract, fell slightly during the week ending August 7 according to brokers.
Oil traders also eyed China economic reports which reported that crude imports rose by more than ism that 10.,4% at 194% in the year-to-date period to increase market optimism that demand would improve.
“It was another strong month for oil imports,” Caroline Bain at Capital Economics told the Wall Street Journal.
. “However, we think the main driver here is continued official and commercial stockpiling, seeking to take advantage of the renewed weakness in the price of oil.”
However, data that then number of active oil drills in the US rose last week to increase concerns that the persistent crude glut was unlikely to abate soon.
According to data by oilfield services provider baker Hughes, the number of active oil rigs in the US, an important indicator of production, rose for the third straight week last week.
“There are a few good reasons that could explain and verify the current low crude oil prices: the strong rally of [the U.S. dollar], current bearish crude oil fundamentals and the recent slowdown of the Chinese economy prompt investors to sell-off,” Myrto Sokou, senior research analyst at Sucden Financial told Market Watch.
“Furthermore, investors could remain cautious amid an imminent increase of U.S. interest rates in September. We could soon see crude oil prices trading back to the $40 per barrel level,” Sokou said.
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