Oil prices have rebounded following Wednesday’s somewhat muted close after crude had rallied nearly 2%, with data from the EIA showing inventories rose for the fourth consecutive week and more than expected. In addition, U.S. supply was shown to have risen to a record 12.6 million barrels a day. Geopolitical risks remain far from abated with the U.S. withdrawing troops from Syria, effectively abandoning a strategic ally in the fight against the Islamic State. On Wednesday, the Turkish military was launching the offensive in Syria to acquire territory held by the U.S. – backed Kurdish forces, which the market largely discounted.
Moreover, trade negotiations between the U.S. and China remain ongoing and appeared to have temporarily escalated earlier in the week after the U.S. imposed restrictions on more than two dozen companies and placed visa restrictions on Chinese officials. Any enhanced tensions with China would only serve to heighten demand concerns and further cloud economic growth worries. These demand concerns are coupled with OPEC cutting its forecast for global oil demand to 0.98 million barrels per day for the third consecutive month. As previously noted, geopolitical risk remains the most consequently factor with risk concerns remaining high. The market remains bearish trend with today’s range seen between 51.05 – 55.51.