- Oil prices rebounded after closing at the lowest level since December 2021.
U.S. crude oil rebounded more than 2% on Wednesday, regaining some ground after prices closed at the lowest level in nearly three years in the previous session.
"Crude Oil has rallied back aggressively," Bob Yawger, executive director of energy futures at Mizuho Securities, told clients in a note.
Yawger said the rally could be due to "Hurricane Francine churning up the US oil patch in the Gulf of Mexico" or speculators "jumping trying to pick the bottom again today."
Here are Wednesday's energy prices:
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- West Texas Intermediate October contract: $67.31 per barrel, up $1.56, or 2.37%. Year to date, U.S. crude oil has fallen around 6%.
- Brent November contract: $70.61 per barrel, $1.42, or 2.05%. Year to date, the global benchmark has declined about 8.4%.
- RBOB Gasoline October contract: $1.8972 per gallon, up 1.45%. Year to date, gasoline has pulled back about 9.8%.
- Natural Gas October contract: $2.27 per thousand cubic, up 1.7%. Year to date, gas is down about 9.7%.
The steep sell-off Tuesday came after OPEC lowered its demand growth outlook for the second time in two months, and as China crude oil imports slow in 2024. Eight OPEC+ members are also expected to increase production in December.
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"Traders are anticipating a deteriorating demand outlook in China and also they are anticipating potentially higher supply coming into the market than we have forecasted so far," Claudio Galimberti, an analyst at Rystad Energy, told CNBC's "Squawk Box Asia" on Wednesday.
Some traders are worried about Brent prices heading toward $60 per barrel, but this level of bearishness is unwarranted, Galimberti said. Supply and demand fundamentals point toward stockpiles falling, and prices can only rise if China's economy rebounds and OPEC+ complies with its own production quotas, the analyst said.
"We are still relatively constructive," Galimberti said. "We don't think we're going to see $60 per barrel in a consistent manner for the next three months."
Correction: This story has been updated to correct the percentage change in the price of the RBOB Gasoline October contract.
