SEOUL (Reuters) – Oil prices were mixed in thin trading on Wednesday as the U.S. benchmark rebounded from steep losses in the previous session, even though concern over the health of the global economy continued to overshadow the market in the longer term.
FILE PHOTO: Oil pours out of a spout from Edwin Drake’s original 1859 well that launched the modern petroleum industry at the Drake Well Museum and Park in Titusville, Pennsylvania U.S., October 5, 2017. REUTERS/Brendan McDermid
U.S. West Texas Intermediate (WTI) crude futures CLc1, were up 29 cents, or 0.68 percent, at $42.82 per barrel, at 0355 GMT, having at one point risen as high as 2 percent from the last close. They had slumped 6.7 percent in the previous session to $42.53 a barrel – the lowest since June 2017.
Meanwhile Brent crude oil futures LCOc1 were down 11 cents or 0.22 percent at $50.36 a barrel, having skidded 6.2 percent in the previous session to $50.47 a barrel, the weakest since August 2017.
“$50 is a psychological support level (for Brent),” said Margaret Yang, market analyst for CMC Markets in Singapore.
“But market confidence needs to be restored for oil price…that include an equity market rebound and/or a bigger production cut from major oil exporters,” Yang said, referring to an OPEC-led agreement to lower output from next month.
Broader financial markets have been under pressure on worries about a global economic slowdown amid higher U.S. interest rates and the U.S.-China trade dispute.
“U.S. equity futures are trading a bit firmer this morning triggering some little buying interest in the oil markets,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.
But Innes added macroeconomics fears will continue unless the Organization of the Petroleum Exporting Countries (OPEC) “reassures markets the viability of their supply cuts and even impose deeper ones as some members have suggested”. OPEC and allies led by Russia agreed this month to cut oil production by 1.2 million barrels per day from January.
Russian Energy Minister Alexander Novak said on Tuesday that oil prices would become more stable in the first half of 2019, supported by OPEC and non-OPEC countries’ joint efforts to cut output.
Elsewhere, U.S. political turmoil triggered by the partial shutdown of the federal government is also adding to market concerns. President Donald Trump said on Tuesday that shutdown could last until his demand for U.S.-Mexico border wall money is met.
Reporting by Jane Chung; Additional reporting by Naveen Thukral in SINGAPORE; Editing by Kenneth Maxwell