Oil bounced above $53 a barrel today, after falling more than a dollar in the previous session on bearish US oil inventory numbers, as investors focused on hopes of an early return to economic growth
US light crude for May delivery rose 67 cents a barrel to $53.44 a barrel by 6.30am having shed $1.21 on Wednesday to settle at $52.77.
London Brent crude rose 77 cents to $52.52.
Prices had fallen yesterday, dragged lower by US government figures showing crude stocks up at their highest levels since July 1993, indicating continued weak demand in the world's largest oil consumer.
The EIA showed seasonal distillates and gasoline draws in its weekly stocks data but said demand over the past four weeks for distillates, which include diesel, is running 9 per cent below last year due to an economically driven slump in trucking, shipping, and manufacture.
Crude stocks could rise further over the next few weeks as refiners cut production further.
The weak oil fundamentals dragged prices lower yesterday, defeating the more bullish mode on the equity markets which closed higher on upbeat US housing and durable good data.
The US government reported that new home sales in the US unexpectedly rose at their fastest pace in 10 months in February, while US orders for long-lasting manufactured goods also unexpectedly rebounded in the same month..
Oil has tumbled from highs above $147 last July as the global economic crisis has dented energy demand worldwide but recovered from lows below $35 touched in December thanks to supplies curbs by the Organisation of the Petroleum Exporting Countries.
The producer group has agreed to cut output by 4.2 million barrels from September levels but an EIA report on Wednesday estimated that the organisation as a whole reached a 67 per cent compliance to the targeted cuts in February, down from previous estimates of compliance at around 80 percent.
Reuters