Oil prices saw their biggest gains in nearly three months Thursday. U.S. crude briefly rebounded to $30 a barrel as U.S. and European stock markets rallied and amid reports U.S. crude stockpiles grew by less than expected.
West Texas Intermediate, the U.S. benchmark, settled up 4.16 percent at $29.53 a barrel in New York. Brent crude, the global oil-price gauge, gained 5.1 percent to $29.29 a barrel Thursday. Neither market had seen one-day percentage gains that large since October, the Wall Street Journal reported. The price of U.S. crude sank to less than $27 a barrel Wednesday, its lowest level since September 2003.
Stocks staged a rebound Thursday after Mario Draghi, head of the European Central Bank, said the institution will review its monetary policy stance in March. The market gains gave some bearish oil traders a reason to take profits on record short positions, Reuters reported.
Oil futures rose again after the U.S. Energy Information Administration reported crude-oil inventories grew by 4 million barrels last week, more than the agency’s forecast of 2.8 million barrels. The American Petroleum Institute, the industry’s main lobbying group, had estimated a 4.6-million-barrel increase late Wednesday, sending oil lower overnight.
“The market was expecting something worse, so we could see a modest [lift],” Bart Melek, head of commodity strategy at TD Securities in Toronto, told the Journal.
Still, the reprieve from falling oil prices likely won’t last long. Surging global oil production continues to outpace demand by far, the result in part of slower economic growth in China. Few traders said they expected a quick recovery from this year’s 20 percent slump, Reuters reported.
“The fundamentals are still weak and you still have worries about economic growth and its impact on fuel demand, so this is probably a sign that things have been overdone more than anything else," Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut, told the news outlet.