Oil rebounded on Wednesday after a sharp drop in the previous session ended a three-day streak of gains as investors have whipsawed between concerns about potential supply losses from Libya and the Middle East and worries about global fuel demand.
Brent crude futures were up 25 cents, or 0.31%, at $79.80 a barrel at 0209 GMT. U.S. West Texas Intermediate crude futures rose 17 cents, or 0.23%, to trade at $75.70.
Prices are bouncing back from Tuesday’s more than 2% decline, which snapped a three-day streak of gains of more than 7%, as concerns about low refinery profit margins weighed on expectations for fuel demand amid data showing global consumption growth has been lower than forecast this year.
The market was also supported by industry data released late on Tuesday showing U.S. oil and fuel inventories fell last week.
However, the biggest risks remain the potential loss of supply in Libya, where about 1.2 million barrels per day of production may be shut in amid a political dispute between rival government factions, and an escalation of the Israel-Gaza conflict to involve militants in Lebanon and forces from Iran, a key Middle Eastern producer. “Geopolitical risks continue to hover over the market,” ANZ analysts said in a note.
