Oil jumps 1 percent after two-day fall, still set for weekly fall

© Reuters. FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland© Reuters. FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland

By Aaron Sheldrick

TOKYO (Reuters) – Crude prices jumped 1 percent on Friday, rebounding after two days of heavy declines with support from robust Chinese crude imports, but oil was still headed for its first weekly decline in five weeks.

futures rose 89 cents, or 1.1 percent, to $81.15 a barrel by 0455 GMT. The contract fell 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown.

Brent is still heading for a 3.6 percent decline this week, the biggest drop in about four months.

U.S. West Texas Intermediate (WTI) crude futures were up 75 cents, or 1.1 percent, at $71.72 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent decline this week.

Asian shares found a slightly firmer footing on Friday to set course for their first gains in two weeks, but the rout continued in Shanghai after Wall Street extended its slide into a sixth session. [MKTS/GLOB]

Japan’s was down 0.3 percent on Friday.

On the oil front, China’s daily crude oil imports in September hit their highest level since May, customs data showed on Friday.

Elsewhere, inventories rose by 6 million barrels last week, the Energy Information Administration said, more than double analysts’ expectations of a 2.6 million-barrel increase. [EIA/S]

The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast of global demand growth for oil next year for a third straight month, citing headwinds facing the broader economy from trade disputes and volatile emerging markets.

OPEC sees the oil market as well supplied and is wary of creating a glut next year, the group’s secretary-general said on Thursday.

“We still estimate oil demand growing at 1.2 million to 1.5 million barrels per day for this year, and see the risk of a slowdown in 2019 if trade tension escalates,” ANZ Research analysts said in a report.

In the U.S. Gulf of Mexico, producers had cut output by 40 percent on Thursday due to Hurricane Michael, even as some operators began returning crews to offshore platforms.

Michael crashed ashore Florida on Wednesday as the third most powerful hurricane to strike the U.S. mainland. It has since weakened to a tropical storm.

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Source: Investing.com