Oil rose for a second day in New York, extending its rebound from a six-year low after US crude inventories fell and investor concern over China’s currency devaluation eased.
Futures added as much as 1 percent. Crude inventories slid by 1.68 million barrels last week to 453.6 million and production also fell, according to a report from the Energy Information Administration.
A measure of oil-price fluctuations rose to the highest level in almost four months on Wednesday after China devalued its currency a second day.
Prices have swung between gains and losses this week on mixed demand signals from China, while remaining almost 30 percent below their June peak amid a global glut. The surplus will last through 2016 as the strongest consumption growth in five years and faltering supply fail to clear the oversupply, according to the International Energy Agency.
“The market should be bottoming out at current prices, and slowly start to rise again by focusing more on the balancing power of declining U.S. production,” Axel Herlinghaus, senior commodities strategist at DZ Bank AG in Frankfurt, said by e- mail.
West Texas Intermediate for September delivery climbed as much as 42 cents to $43.72 a barrel on the New York Mercantile Exchange, and traded at $43.44 at 11:14 a.m. London time. The contract gained 22 cents to $43.30 on Wednesday after closing at the lowest since March 2009 on Tuesday. Prices have fallen 18 percent in 2015.
Brent for September settlement, which expires Friday, rose 56 cents to $50.22 a barrel on the London-based ICE Futures Europe exchange. It gained 48 cents to $49.66 on Wednesday. The more-active October contact rose 49 cents to $50.67. The European benchmark crude traded at a premium of $6.76 to WTI.
U.S. crude stockpiles remain more than 90 million barrels above the five-year average for this time of the year, even after the decline through Aug. 7, according to EIA data. Output dropped by 70,000 barrels a day to 9.4 million a day.
“We are probably close to a bottom” for oil prices, Christin Tuxin, a senior analyst at Danske Bank A/S in Copenhagen, said in a report. In the U.S., “supply growth could decline further out and help establish a floor in prices.”
The Chicago Board Options Exchange Crude Oil Volatility Index closed at 42.40 Wednesday, the highest level since April 16. The gauge of hedging costs on the U.S. Oil Fund, the largest exchange-traded fund tracking WTI, rose 6.1 percent last week.
Record global inventories are set to expand further even as consumption growth doubles in 2015 and supplies outside the Organization of Petroleum Exporting Countries contract next year for the first time since 2008, the IEA said in its monthly report Wednesday. Stockpiles won’t be diminished until the fourth quarter of next year, or even later if sanctions on Iranian crude are lifted, the agency said.