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US crude oil snaps 4-day losing streak, Brent slips
[NEW YORK] US crude oil prices rose for the first time in five days on Tuesday, while Brent dropped amid worries about abundant global supplies ahead of the weekly US petroleum inventories report.
US benchmark West Texas Intermediate (WTI) for September delivery rose 59 cents to US$47.98 on the New York Mercantile Exchange.
Brent North Sea crude for delivery in September closed at US$53.30 a barrel in London trade, slipping 17 cents from Monday's settlement in a fifth day in a row of declines.
Commodity markets in general were calmer after a recent rout fueled by weak economic data and a plunge in Chinese equities that has investors on edge about China's slowing economy.
After Monday's 8.5 per cent drop in Chinese stocks, the steepest one-day fall in eight years, Shanghai-traded stocks shed a relatively modest 1.7 per cent, helping to put US and European equities on the upswing.
Kyle Cooper of IAF Advisors said that much of Tuesday's WTI gain "is due to a normal market rebound, as the market had fallen a lot... and was way too oversold." "US equities are rebounding as well so I think the market is taking a little bit of breather," he added.
Analysts fear the turmoil in China's stock market will affect demand in the world's second-biggest crude consumer after the United States.
"The potential for decreased Chinese demand amid the current global oil glut has hit an already bearish market," said Robbie Fraser of Schneider Electric.
"Strong Iraqi and worldwide production numbers have prompted some recent reports to anticipate that the global oversupply will last another 18 months," Mr Fraser said. "Until the oversupply is reigned in, any meaningful rebound for crude prices remains unlikely."
Analysts expect the US Department of Energy to report that the country's crude stockpiles rose by 700,000 barrels last week, according to a survey by Bloomberg News.
Lat week the DoE said US refineries had pumped out about an average of 16.9 million barrels per day in the previous week as they operated at a high 95.5 percent of capacity.