Oil rose amid estimates of another decline in U.S. crude inventories and signs that China is stepping up efforts to combat an economic slowdown.
Futures in New York climbed as much as 1.6 percent after dropping 4 percent over the past two sessions. American stockpiles probably fell for the sixth time in seven weeks, according to a Bloomberg survey of analysts before government data due Wednesday. Equities advanced across Europe and Asia after senior Chinese officials promised tax cuts to boost growth.
“Essentially we have gone from pricing a recession back to a more moderate outlook within the span of just six weeks,” said analysts at JBC Energy GmbH in Vienna.
While oil is resuming an advance that took it into a bull market last week, it’s still more than 30 percent below October’s four-year high. China’s weakest trade data since 2016 have stoked concerns over the impact of an ongoing trade war with the U.S. But senior policy officials said this week that China will cut taxes “on a larger scale” to help support its slowing economy.
West Texas Intermediate for February delivery climbed as much as 81 cents to $51.32 a barrel on the New York Mercantile Exchange, and traded at $50.83 as of 10:42 a.m. London time. The contract dropped 2.1 percent on Monday, falling for a second straight session.
Brent for March settlement gained 42 cents to $59.41 a barrel on the London-based ICE Futures Europe exchange, and traded at an $8.27 premium to WTI for the same month. The global benchmark crude closed down 2.5 percent on Monday.
In the U.S., nationwide stockpiles probably declined by 2.5 million barrels last week, according to the median estimate in a Bloomberg survey. If confirmed by government data on Wednesday, that will mean inventories are staying near their lowest level since early November.
Other oil-market news: OPEC and its allies will review their output cuts in Baku, Azerbaijan, on March 17-18, before ministers gather in Vienna on April 17-18. Saudi Arabia recently said the coalition will do more if it needs to. The U.S. plans to grant no new waivers to buyers of Iranian oil as it intensifies efforts to eliminate the Middle Eastern producer’s exports of crude, a senior American administration official said. Venezuelan President Nicolas Maduro ordered a 300 percent increase in the monthly minimum wage and pledged to boost oil production to 5 million barrels a day by 2025 during his state of the union address Monday.