Oil prices have recovered some of the earlier losses driven by the expansion in the Chinese services sector.
Brent crude jumped $0.31 to $58.57 a barrel, while US West Texas Intermediate futures climbed $0.34 to trade at $54.28 per barrel, Reuters reported.
In an earlier session, crude prices plunged to a nearly one-month low due to growing concerns of a global economic slowdown. The concerns further gripped the market after data showed that manufacturing activity in the US in August 2019 declined for the first time in three years.
The recent announcement by the US President Donald Trump that he would take ‘tougher’ stance against China in the second term if the trade impasse continues, also pressured the oil prices.
However, the oil market rebounded after a private survey showed the services sector in China expanded at the fastest pace in three months in August 2019.
Reuters quoted Citi bank analysts as saying in a note: “The oil outlook is looking significantly weaker than it did at the start of the year.
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“Much of the perceived loosening in fundamentals is coming from the demand rather than the supply side.”
Additionally, the US bank revised its earlier Brent crude price forecasts, reducing it by around $10 a barrel to $62 and $64 for the third and fourth quarters of this year, respectively. It also predicted that Brent prices may slip to $53 per barrel by the end of 2020.
Currently, the global benchmark of oil prices is trading at 23% lower than its April 2019 prices.