Oil prices recover after tumbling 5% on higher US output

Oil prices recovered slightly on Thursday after plunging 5 percent in the previous session to their lowest level in 2017, as official data showed a surge in US inventories over the past week.

Brent crude was last trading 0.8 percent higher at $53.55 per barrel (bbl). The global benchmark slid 5 percent on Wednesday before settling at $53.11/bbl.

West Texas Intermediate (WTI) was last up 0.6 percent at $50.59/bbl, after falling nearly 5.4 percent overnight to $50.28/bbl.

The reason behind the overnight plunge in oil prices was “a bearish confluence of the USD-supporting jobs data from ADP and a more than 8 million bbl build in US crude stockpiles,” Dubai-based Emirates NBD said on Thursday.

US crude stockpiles jumped by 8.2 million barrels in the week to March 8, data from the Energy Information Administration (EIA) showed.

Total inventories have now hit new record high levels four weeks running and stockpiles have increased by nearly 50 million barrels since the start of 2017.

Oil has been trading in the $50-55 range since the start of the year, as rising US inventories offset the boost from supply cuts agreed upon last year between OPEC and non-member oil producers.

The cartel inked a deal with 11 oil producers last December to cut production by a combined 1.8 million barrels per day (mbd), in order to shore up prices and ease a global supply glut.

Write to Jerusha Sequeira at jerusha.s@argaamnews.com