FXStreet (Mumbai) – The US oil stretches its overnight recovery mode into mid-Asia and rises towards $ 31, having broken below $ 30 threshold for the first time since 2003.
WTI recovers from a brief dip below $ 30
Currently, WTI rises over 1.40% to 30.88, flirting with 31 barrier. Oil prices stalled its downward spiral and rebounded higher this session as markets resorted to profit-taking on their shorts, after the prices bounced-off a brief dip below the psychological $ 30 mark.
The recovery in the oil prices could be also attributed to the calmer Asian markets, driven by yesterday’s PBOC intervention and the latest upbeat China trade data. China is world’s second largest oil consumer.
Moreover, the oil bulls were offered some respite after Tuesday’s API report showed that the crude reserves fell last week, somewhat easing the persistent oversupply worries. The API report showed that the US crude inventories fell by 3.9 million barrels last week.
Meanwhile, a seven-day losing streak fuelled by concerns about a continued supply glut and fragile demand from China, the world’s no. 2 consumer, has wiped out almost a fifth of crude prices this year and 70% since mid-2014. Markets now await the EIA weekly stockpiles report for further cues on the oil price action.
(Market News Provided by FXstreet)