Oil futures jumped more than $1 a barrel on Thursday amid a weaker dollar, recovering ground after concerns that a global economic slowdown would hurt crude demand sparked losses of over 4 percent in the previous session.
Brent crude had rebounded to $57.52 a barrel, up $1.29, or 2.29 percent, from its last close by 0032 GMT, while US crude futures jumped $1.30, or 2.54 percent, to $52.39 a barrel.
Both contracts hit their lowest levels since January on Wednesday after a surprise build in US crude inventories added to worries that the brewing Sino-US trade war could further dampen demand-growth this year.
“The US dollar is losing some steam and easing some of the pressure on oil prices,” said Alfonso Esparza, a Toronto-based senior market analyst at Oanda.
Talk of more action to prop up oil markets from Saudi Arabia and other producers in the Organization of the Petroleum Exporting Countries (OPEC) also supported crude prices.
Bloomberg in a report on Wednesday cited a Saudi official saying that the world’s top exporter is in talks with other producers to take action to halt the oil price slide.
“Trade war rhetoric will continue to guide markets, but the comments from Saudi Arabia could lead to unprecedented action to stabilize prices,” Esparza said.
“It is hard to imagine what that would look like given how hard it was to get the OPEC+ to agree to the production limit agreement, but given the potential free fall from crude if the trade war continues, no option is off the table.”
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