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Oil rebounds from 2-month lows
[NEW YORK] Oil prices rebounded Tuesday from two-month lows as an Opec forecast pointed to easing of the global oversupply that has weighed on the market.
Traders bid up crude oil after Monday's rout, in what some analysts said was due partly to a technical correction. The oil market swung higher along with a strong rally across equity markets.
US benchmark West Texas Intermediate for August delivery jumped US$2.04 to US$46.80 a barrel on the New York Mercantile Exchange.
In London, Brent North Sea crude for delivery in September finished at US$48.47 a barrel, a gain of US$2.22 from Monday's settlement.
"Part of it was some short-term optimism in Opec's monthly oil market report," said James Williams of WTRG Economics.
In its July report, the Organization of the Petroleum Exporting Countries said it expected the global supply glut to ease further this year and next thanks to reductions in output from producers outside the cartel, particularly the United States.
The 14-member cartel, which provides about one-third of the world's crude, has squeezed competitors by keeping the taps open. It reported that its June production rose by 264,000 barrels per day to an average 32.9 million barrels per day.
Opec predicted global demand growth would pick up in 2017.
"Thus, market conditions will help remove overall excess oil stocks in 2017," the report said.
But Tim Evans of Citi Futures noted the Opec scenario "also suggests it will be 2018 before we see global inventories trending lower."
The US Department of Energy, in a monthly report, said the country's crude oil production fell in June to an average 8.6 million barrels per day, and left its 2017 output forecast unchanged at 8.2 million barrels per day.