The steep decline in oil price paused yesterday for the first time in five days, after benchmark Brent caused consternation as it fell to below $50 a barrel.
Crude prices at last turned positive as Brent hovered near $51 a barrel last night, after recovering from a session low of $49.66 earlier. US crude was also up 70 cents at $48.63, after rallying earlier to $49.31.
Some traders said oil markets could be at a crossroads after losing over half their value from June highs, especially after an astounding 10% drop in the past two days.
But some analysts thought yesterday’s price action was just a reprieve ahead of another fall in the price.
“I would call this a dead cat bounce,” said Tariq Zahir, managing member at Tyche Capital Advisors. “Nothing’s fundamentally changed. These people that have gone trying to pick a bottom have been wrong for weeks on end.”
The Energy Information Administration (EIA) said US crude inventories fell by just over 3million barrels last week, versus analysts’ expectations for a build of 880,000 barrels. This reduced fears that US shale producers were adding to a glut to world supplies.
Some analysts said better-than-expected US jobs data on Wednesday could have aided sentiment in oil.
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