FXStreet (Mumbai) – Oil benchmarks on both sides of Atlantic continues their sharp upside correction following Monday’s slide to twelve-year lows, although oversupply worries keep a lid on the prices.
Rising Chinese oil demand underpins
Currently, WTI trades 1.79% higher at 30.92, while the Brent oil jumps 4.20% to 29.80. Oil prices stage solid comeback in Europe, extending the recovery attempts seen in Asia, as markets resorted to profit-taking on their oil shorts after the prices fell to their lowest levels since 2003.
Moreover, the black gold appears to have found support from reports that Chinese oil demand hits record highs. Preliminary Reuters calculations based on government figures showed record oil consumption of 10.32 million barrels per day (bpd), up 2.5% from 2014. China is the world’s second largest consumer of oil.
However, the gains remain capped as markets fret over persisting oversupply worries, with the latest report published by International Energy Agency (IEA) stating that global glut is set to last until at least late 2016.
The IEA noted, “While the pace of stock building eases in the second half of the year as supply from non-OPEC producers falls, unless something changes, the oil market could drown in oversupply.”
On Monday, the concerns over Tehran flooding the market with millions of barrels of oil, especially after Western sanctions were lifted over the weekend, triggered a renewed sell-off in both crude benchmarks, drowning them to fresh 12-year lows.
(Market News Provided by FXstreet)