Oil prices rebounded Friday after tanking nearly five percent the day before as bargain hunters swooped into the market.
Oil prices rebounded Friday after tanking nearly five percent the day before as bargain hunters swooped into the market.
The commodity plunged Thursday in response to US commercial inventories falling less than expected last week, indicating softer demand in the world's top oil consumer as the summer driving season kicks in.
At around 1035 GMT the US benchmark West Texas Intermediate was up 27 cents, or 0.6 percent, at $45.41 and Brent gained 25 cents, or 0.5 percent, to $46.65.
Thursday's oil stocks data added to an already downbeat mood on markets as investors worry about the longer-term fallout from Britain's vote to leave the European Union.
Friday's fresh buying was supported by investors finally focusing on a steep fall in US production, a decline the market at first "completely ignored", according to Commerzbank analysts.
The production drop reported Thursday was the greatest since the 2013 hurricane season and "is contributing hugely to the tightening of global supply", they said.
Societe Generale analyst Michael Wittner said the decline underpinned his view "that the global market has shifted from massive oversupply to broadly balanced" for the rest of this year.
However, both Brent and WTI were more than six percent lower than last Friday.
IG Markets analyst Bernard Aw said traders were looking for bargains after Thursday's "substantial drop" in prices, but added the oversupply concerns will linger.
Those worries were fuelled by the Energy department also reporting a much smaller than expected decline in petrol stockpiles during the summer season, when Americans take to the road for their holidays, he said.
Noting that the summer driving season in the US still has two more months to go, Aw said that "traders now fear that we could see a worsening of the supply overhang when summer is over."
Prices were also given some support after militant groups in Nigeria, Africa's biggest oil producer, attacked more oil infrastructure targets in the country's south.
