Oil bounced back in Asia today on bargain-hunting after tumbling in the previous session over a further surge in US crude reserves, adding to the global supply glut.
US benchmark West Texas Intermediate (WTI) crude for April delivery rose 54 cents to $48.71 a barrel, while Brent crude for April delivery rose 66 cents to $60.71 in late-morning trade.
WTI sank $2.82 in New York, while Brent closed $1.58 lower in London.
Analysts attributed the plunge yesterday to a delayed reaction by traders to a bigger-than-expected 9.4 million barrels increase in US crude stockpiles in the week to February 20.
The US Department of Energy had said on Wednesday that US crude reserves now stand at a record 434.1 million barrels.
“The build in inventories has been a factor in the price tumble but traders have kicked off from the down draft sharply,” Michael McCarthy, chief market analyst at CMC Markets in Sydney, told AFP.
“As the increases are slight at the moment, it’s likely that there is some form of bargain hunting,” he said.
Crude prices lost about 60 per cent of their value to about $40 between June and late January owing to an oversupply in world markets, a weak global economy and a strong dollar.
Prices have risen above multi-year lows following a slowdown in US oil drilling activities, but analysts say volatility is likely to continue for some time.