Oil prices bounced back during the course of the session on Thursday after recording sharp losses in the previous day, with a slight drop in U.S. crude inventories with hopes for a gradual retreat on the global supply.
Brent crude futures edged higher at $53.08 per barrel, up 15 cents or 0.3 percent from the previous session.
U.S. West Texas Intermediate (WTI) crude futures soared 12 cents or 0.2 percent and ended at $50.56 a barrel.
Meanwhile, investors believed that the reduction in commercial U.S. crude stocks has contributed to the recent gains, which posted losses about 1 million barrels and ended at 532.34 million barrels last week, according to the U.S. Energy Information Administration (EIA).
Crude oil prices held higher on Thursday, following an over 3.5 percent drop in all crude benchmarks in the past session after reports came that gasoline inventories were surging, including another rise in U.S. crude oil production, which stood at 9.25 million barrels per day (bpd).
As the refining activity is constantly rallying, the U.S. gasoline stocks posted a counter-seasonal build of 1.5 million barrels.
The rising U.S. crude production created fears on traders as the oil supply overhang is likely to continue, while recent gains in gasoline stocks has led demands to shrink.
"The fact that gasoline stocks rose... worried traders that demand is not as strong as many thought," chief market strategist Greg McKenna said.
Elsewhere in China, fuel supply overhang persists due to Chinese refiners that were reportedly using crude oil imports in order to produce bulk gasoline and diesel more than the country can absorb.
Based on China’s National Bureau of Statistics, the country’s March gasoline output surge 2.5 percent on a year over year basis to 11.24 million tonnes, marking its all-time high since April 2014.
Oman Oil Company Seeks Banks
Sultan state-owned energy producer Oman Oil Co., seeks banks for help to sell a few energy assets and list units on the market in the wake of rival Saudi Arabian Oil Co. plans to sell shares to the public.
In a recent statement, Oman Oil Minister Mohammed Al Rumhy said that the objective of the oil and gas producer is to lure more foreign investment in the country. He declined to comment on the banks involved in the energy sales, but mentioned that State-run Salalah Methanol Co. is to issue stock to the public.
“We are looking at the IPO option because we want to give a boost to the local stock market, and we want to see more foreign direct investments coming to the country,” Al Rumhy said in the interview.
The chart below illustrates crude oil price movement amid a reduction in commercial U.S. crude stocks. Oil is currently trading at $51.21 in a light trading volume of 1593, near resistance 51.26, which could test its nearest resistance if prices will continue to retreat.
As oil prices cut its sharp losses in the previous sessions, we recommend market participants to wait on the sidelines until the nearest resistance level is tested. So far, there is no strong signs if oil prices will recover.
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