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Crude oil futures rebound from massive sell-off one day earlier

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Investing.com -

Investing.com -- Crude oil futures pared some of their losses on Thursday from one of the sharpest daily declines on the year, following a record buildup last week as supply concerns continue to weigh on energy prices.

On the New York Mercantile Exchange, WTI crude oil for May delivery rose 0.45 or 0.89% to 50.87 a barrel. Crude prices for Texas light sweet moved up steadily in U.S. afternoon trading to reach a high of 52.03, before falling off slightly before the close.

A day earlier, crude oil futures plummeted more than 6% after the Energy Information Administration (EIA) said in its weekly inventory report on Wednesday that U.S. crude oil storage increased by 10.95 million barrels for the week that ended April 3, more than tripling its expected count of 3.28 million. The figure represents the largest weekly buildup for WTI crude nationwide since 2001.

The surprising inventory build pushed stockpiles to 482.4 million barrels, the highest level in more than 80 years. The glut of supply has heightened fears that the U.S. will reach full storage capacity by the end of next month, a trend that some analysts believe may push WTI crude below $35 a barrel.

On the Intercontinental Exchange (ICE), brent crude for May delivery rose 1.06 or 1.91% to 56.61 a barrel. Brent futures reached a daily-high of 58.01 in U.S. afternoon trading before settling slightly lower. The spread between the international and U.S. domestic benchmarks increased to $5.74, above Wednesday's level of $5.07.

The prices surged as Iran oil minister Bijan Zanganeh told Reuters during his visit to China that Opec will "coordinate itself," to adapt to his nation's return to oil markets as a safeguard for preventing prices from crashing. Iran reportedly has 30 million barrels of oil ready for export after the Persian Gulf nation reached the framework of a nuclear deal with Western powers last week.

The preliminary accord resulted in the easing of economic and financial sanctions levied by the U.S. and the European Union that have limited Iranian exports to approximately a million barrels of crude oil since 2012.

Energy traders await the release of Friday's weekly rig count from energy services firm Baker Hughes (NYSE:BHI). Last week, the number of oil and gas rigs nationwide declined by 20 to 1,028. By comparison, there were 1,818 active rigs in the U.S. last year at this point.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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