Oil prices remained under pressure on Thursday despite declining U.S. supplies as investors braced for the outcome of a key meeting of the Organization of the Petroleum Exporting Countries. Brent crude for July delivery recently fell 0.7% to $63.36 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures for July were trading down 0.6% at $59.28 a barrel.
Oil prices rallied on Thursday, recouping some ground after sharp losses the previous session when Libya said it would resume oil exports.
The rally received a boost from the International Energy Agency (IEA), which said the world’s oil supply cushion “might be stretched to the limit” due to production losses.
Benchmark Brent crude oil LCOc1 rose $1.70, or more than 2.3 percent, to a high of $75.10 a barrel before easing back to trade around $74.40 by 1055 GMT. On Wednesday, Brent slumped $5.46 or 6.9 percent.
U.S. light crude CLc1 gained 50 cents to $70.88 a barrel, after falling 5 percent the previous session.
“The market fell out of bed yesterday as support failed (but was)… probably overdone to the downside,” said Robin Bieber, technical analyst at London brokerage PVM Oil Associates. “Sharp attempts to recover are to be expected.”
An announcement by Libya’s National Oil Corp that four oil export terminals were reopening, ending a standoff that had shut down most of Libya’s oil output, was a key catalyst for the price fall on Wednesday, analysts said.
The reopening will allow the return of up to 850,000 barrels per day of high-quality crude oil to international markets.
An escalating U.S.-China trade row had helped depress oil prices as it raised the prospect of faltering global growth and lower energy consumption, particularly in emerging markets.
But Thursday brought a more positive mood in the oil market as the IEA reminded investors of the large number of output disruptions keeping pressure on global oil supply.