SINGAPORE (Reuters) – Oil rebounded above $76 a barrel on Wednesday, after falling 2 percent a day earlier on disappointing U.S. growth and data showing a big build in crude inventories, signaling weak demand in the world’s top energy user.
U.S. crude for January delivery rose 39 cents to $76.41 a barrel by 0639 GMT, after settling down $1.54 at $76.02 on Tuesday. London Brent crude was up 50 cents at $76.96.
Crude prices have more than doubled from levels below $33 last December, though they are still around 48 percent lower than a record high of above $147 hit in July 2008.
U.S. crude oil stocks rose 3.3 million barrels in the week to November 20, eclipsing forecasts of a 1.2-million barrel build from analysts polled by Reuters this week, the report from the API showed. <API/S> The EIA will release its own data at 1530 GMT.
Sentiment soured further on signs that demand in Japan, the world’s third-largest oil consumer, remained sluggish, with crude imports sliding for the 12th straight month in October.
“Fundamentals are not looking too good, and sentiment has turned due to the weaker data from the United States,” said Sumisho Sano, general manager for research at SCM Securities in Tokyo.
“We could see oil break below the crucial $75-$76 level, and trade down to $65-$75. If we do break $75, there will be a lot of liquidation in the market.”
The release of U.S. Energy Information Administration (EIA) data later in the day could confirm the bearish figures from the American Petroleum Institute (API) and set the market’s tone, although trading is expected to remain light ahead of the Thanksgiving holiday.
Traders will also scrutinize economic data due later, including weekly U.S. jobless claims and October durable goods orders, for signs of improvement in the world’s largest economy.
Oil markets have increasingly looked to economic data this year for signs of a global recovery to boost flagging demand.
Prices have risen amid rallying equity markets and a weaker U.S. dollar, which makes crude more attractive for foreign currency holders. The dollar hit its lowest in 7 weeks against the yen on Wednesday after mixed U.S. data fanned worries about a global rebound.
Underscoring the fragile state of the recovery, a second estimate of third-quarter GDP by the Commerce Department showed the U.S. economy grew at a much slower annual pace of 2.8 percent in the third quarter, versus an earlier estimate of 3.5 percent.
But a fifth month of gains in house prices in September and an improvement in consumer morale indicated that the world’s largest economy had probably exited from its most painful recession in 70 years.
Japan’s oil demand showed little improvement. The country imported 16.214 million kilolitres (3.29 million barrels per day) of crude last month, down 18.4 percent and the lowest for the month since 16.099 million in 1989, preliminary data showed.
More mixed economic data is on the cards out of the United States. The Commerce Department will release October durable goods orders at 1330 GMT, with economists expecting a small rise of 0.5 percent rise versus September’s increase of 1.4 percent.