Wednesday, September 9, 2015 11:51 am
Crude oil prices rose on Wednesday as Asian stock markets caught a tailwind from a strong performance in the U.S. and Europe.
Asian shares extended a global rally on Wednesday, with markets in China stabilising and Japanese stocks posting their biggest one-day gain since the height of the global financial crisis in 2008.
Traders said the more upbeat sentiment had flowed into oil markets.
The Brent global crude benchmark was trading at 49.64 dollars per barrel, up 12 cents from its last settlement after jumping four per cent in the previous session.
“Stabilisation in Chinese equity markets has… played an important role,” ABN Amro said on Wednesday, referring to firming Brent.
In Japan, weekly crude and refined products statistics showed stable utilisation rates and stock levels.
U.S. West Texas Intermediate crude was weaker. It slipped 10 cents to 45.84 dollars a barrel after falling in the previous session as the end of the U.S. summer driving season pulls down fuel consumption.
General concerns remained that high global production was being met with a growing slowdown in demand, especially due to the economic slowdown in China.
On the supply side, speculation that some producers might cooperate in cutting output in support of prices was dealt a blow this week by Russia and Mexico, who both said they would not cut.
The Organisation of Petroleum Exporting Countries (OPEC) is producing close to record volumes to squeeze out competition, especially from U.S. shale producers.
U.S. shale producers have so far weathered the price plunges to keep pumping oil.
OPEC said that Indonesia was reactivating its membership of the oil exporter club despite being a net crude importer.
If completed, the move would add almost three per cent to OPEC’s oil output.
Indonesia would be the fourth-smallest OPEC producer ahead of Libya, Ecuador and Qatar, and bring the number of participants to 13 countries.
Indonesia was the only Asian OPEC member for nearly 50 years before leaving the group at the start of 2009 as oil prices hit a record high.
Factors such as rising domestic demand and falling production turned it into a net oil importer.