Oil halted its decline after falling the most in six weeks as signs of rising demand in China countered an increase in OPEC production.
Futures climbed as much as 1.3% in New York after Monday’s 5.1% drop.
China’s crude purchases rebounded in September from a three-month low even as total imports extended a slump. Global oil consumption is expanding while non-OPEC nations will supply less, according to Abdalla Salem El-Badri, the secretary-general of the Organization of Petroleum Exporting Countries.
Oil advanced above $50 a barrel last week for the first time since July but has failed to sustain gains amid speculation the market could remain oversupplied. China’s economic slowdown is still impacting on global growth amid this year’s plunge in commodity prices. OPEC raised its production to the highest level since 2012 as it predicted stronger demand for its crude.
“Any rally in oil is going to be muted because the factors that pushed the price lower haven’t changed,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “There is still an oversupply.”
West Texas Intermediate for November delivery rose as much as 62 cents to $47.72 a barrel on the New York Mercantile Exchange. The contract fell $2.53 to $47.10 on Monday. The volume of all futures traded was 2 percent below the 100-day average. Prices are down about 11 percent this year.
Brent for November settlement climbed as much as 68 cents, or 1.4%, to $50.54 a barrel on the London-based ICE Futures Europe exchange. It decreased $2.79 to $49.86 on Monday. The European benchmark crude was at a premium of $2.87 to WTI.
China imported the equivalent of 6.83 million barrels a day of crude in September, compared with 6.29 million a day in August, the Beijing-based General Administration of Customs said on its website today. Total imports extended the longest losing streak in six years, underscoring the headwinds to global growth from a re-balancing in the economy.
OPEC increased its forecast for the amount of crude it will need to supply next year by 500,000 barrels to 30.8 million a day, its monthly report showed on Monday. The 12-member group produced 31.57 million barrels a day in September, while US output is projected to shrink in 2016 for the first time in eight years.
“The current situation in the market is positive,” El-Badri said at a conference in Kuwait City. “I expect to see a balanced market in 2016, if the current situation persists.”
US crude stockpiles probably expanded by 2.58 million barrels last week, according to the median estimate in a Bloomberg survey of eight analysts before Energy Information Administration data on Thursday. Inventories gained for a second week through Oct. 2 to 461 million barrels, keeping supplies about 100 million above the five-year seasonal average.