Crude oil futures edged up on light bargain hunting on Tuesday, after U.S. and Brent crude tumbled in the previous session to post their biggest daily percentage declines since the start of September.
Oil prices sank on Monday after a report that OPEC continued to boost production. China trade data showing a deterioration in its economy and expectations of higher crude stockplies in the United States helped limit any recovery.
Global benchmark Brent crude had gained 40 cents to $50.26 a barrel by 0243 GMT, after dropping $2.79 in the previous session to $49.86. U.S. crude for November rose 31 cents to $47.41 a barrel after settling down $2.53 at $47.10.
“We think that prices are likely to remain capped to the upside for the remainder of this quarter in line with our forecast due to weakening product demand, burgeoning crude and product stocks, and limited supply adjustments,” Barclays said.
Kuwait said on Monday there were no calls within OPEC to change the oil group’s production policy and that lower output from high-cost producers could support prices in 2016, adding to signs OPEC will keep its strategy of defending market share.
OPEC forecast that demand for its oil in 2016 would be much higher than previously thought as its strategy of letting prices fall hits U.S. shale oil and other rival supplies, reducing a global surplus.
Venezuela, whose economy has been decimated by low oil prices, will this month unveil a new strategy to revive them, taking a page from OPEC’s history books with a proposed price band to build an automatic floor for prices at $70 a barrel.
“Oil dropped the most in three weeks after OPEC reported that its members pumped the most crude in three years. U.S. crude stockpiles are also expected to rise when released later this week,” ANZ said in a note on Tuesday.
A preliminary Reuters survey, taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) and the U.S. Department of Energy’s Energy Information Administration (EIA), showed a crude stock build of 2.8 million barrels on average in the week ended Oct. 9.
China’s exports fell 1.1 percent from a year earlier in September in yuan-denominated terms, while imports tumbled 17.7 percent.
Asian shares stepped back from two-month highs on profit-taking on Tuesday, while the dollar was on the defensive as expectations of an imminent U.S. rate hike receded.