Oil bounces above $ 63 after slippage, but overabundance lingers

LONDON (Reuters) – Oil surpassed $ 63 a barrel on Wednesday to recover some of the 6% drop recorded the day before, amid reports of an unexpected decline in US inventories. of crude.

The American Petroleum Institute (API) said on Tuesday that US crude oil inventories fell by 1.5 million barrels last week, easing fears of oversupply.

"The movement of yesterday was extremely lively; after such movements, you expect a certain rebound, "said Olivier Jakob, an analyst at Petromatrix. "The API has reported a draw of stocks – it's not a big one but at least it's not a 10-million-barrel build."

Brent crude LCOc1, the global benchmark, rose $ 1.00 to $ 63.53 per barrel at 12:02 GMT and traded at $ 63.77. US crude CLc1 gained between $ 1.01 and $ 54.44.

But Wednesday's rebound did little to reverse the general weakness of the market. Crude oil fell by more than 6% in the previous session, and global equities fell as investors became more worried about the prospects for economic growth.

Brent has fallen more than 25% since the record reached since October 3, amounting to 86.74 dollars (86.74 USD), reflecting concern about slowing demand in 2019 and a record bid from Saudi Arabia, Russia and the United States.

Concerned by the prospect of a new overabundance of supply, the Organization of Petroleum Exporting Countries plans to reduce its production only a few months after increasing its production.

The OPEC, Russia and other non-OPEC producers are planning to reduce their supply of one million barrels per day (bpd) to 1.4 million bpd during Meeting on December 6, sources close to the file said.

Nevertheless, analysts believe that Saudi Arabia may find it more difficult to support prices, while the United States is exerting pressure to keep prices low.

Riyadh may be more inclined to respond to US demands after President Donald Trump promised Tuesday to be an "unwavering partner" of Saudi Arabia, while Crown Prince Mohammed bin Salman was at the helm. running a murder project of journalist Jamal Khashoggi at the Saudi consulate in Istanbul.

"It is more difficult to expect a reduction in supply when the US President gives his full support to Saudi Arabia and calls on Saudi Arabia to keep prices low" said Jakob.

JBC Energy analysts said Trump's statement "highlights the potential for political spillovers for the Saudi of a significant reduction in production."