Global oil prices have rebounded on expectations that reduced crude prices will trigger production cuts, after hitting their lowest levels since January.
Brent crude increased by $1.52 to $57.75 a barrel while the US West Texas Intermediate (WTI) crude futures rose by $1.51 to reach $52.60 a barrel, reported Reuters.
Both oil benchmarks dropped nearly 5% in earlier sessions, following an unexpected increase in US crude stocks exacerbated the already tense market over the US-China trade war.
According to government data, the US stocks increased by 2.4 million barrels, reversing the trend of the consecutive seven-week fall. The US gasoline inventories also increased by 4.4 million barrels.
Crude production in the country is also set to increase by 1.28Mbpd to 12.27Mbpd this year.
Analysts told the news agency that the oil prices recovered some losses on expectations that major crude producers may reduce supply to prevent further fall. A weaker US currency also supported the rebound.
Energy Aspects oil analyst was quoted by Reuters as saying: “The threshold is $60 a barrel and if you go below that for a significant period of time, I would expect supplies to be taken off the market in order to support prices up.”
Earlier, Bloomberg reported that Saudi Arabia is in talks with other key producers over the recent crude market situation.
OANDA senior market analyst Alfonso Esparza was quoted as saying: “Trade war rhetoric will continue to guide markets, but the comments from Saudi Arabia could lead to unprecedented action to stabilise prices.”