Oil jumps more than 1.0pc after two-day fall, still set for weekly drop

Crude prices jumped 1.0 per cent on Friday, rebounding after two days of heavy declines with support from robust Chinese crude imports, but oil was still heading for its first weekly drop in five weeks.

Brent crude futures had risen $1.02 cents, or 1.3 per cent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 per cent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown.

Brent is still on course for a 3.4 per cent decline this week, the biggest drop in about four months.

US West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 per cent, at $71.77 a barrel, after a 3.0 per cent fall in the previous session. WTI is on track for a 3.5 per cent drop 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.

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

Shipments into the country last month totalled 37.12 million tonnes, or 9.05 million barrels per day (bpd), up from 9.04 million bpd in August and their third straight monthly rise.

Elsewhere, US crude inventories climbed by 6 million barrels last week, the Energy Information Administration said, more than double analyst expectations of a 2.6 million-barrel increase.

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, according to Reuters news agency.

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

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