Oil prices rebound

Oil prices rebounded slightly Thursday after tanking the previous day, but gains were capped by US stockpiles data and the prospect of rising output in Libya and Nigeria, dealers said.

At about 1015 GMT, US benchmark West Texas Intermediate for delivery in October was up 20 cents at $43.78 a barrel.

Brent North Sea crude for November delivery won 32 cents to $46.17 compared with the close on Wednesday.

The market had tumbled Wednesday after the US Energy Information Administration (EIA) said gasoline and distilled products inventories rose last week, overshadowing news of a surprise fall in crude supplies.

Later Wednesday, Libya’s National Oil Corporation said it would double production within four weeks after it was handed control of crucial ports that had been seized by forces loyal to the country’s rival administration.

The news from Libya — which has Africa’s largest oil reserves — fanned long-standing worries about a global supply glut and overproduction that have hammered prices for more than two years.

At the same time, Nigeria — which is the African continent’s biggest crude producer — appears set to also increase its oil exports, traders said.

“Oil arrested a slump that had seen it fall … for two consecutive days,” said analyst Chris Todd at brokerage Love Energy, noting prices were buoyed by the US inventory data.

“The EIA report on US stocks bucked analysts’ expectations for a second week, showing a decline of 559,000 barrels as opposed to the expected gain of around 3.8 million barrels.

“However, with both Libya and Nigeria looking set to ramp up exports as the impact of internal conflicts in both countries lessens, concerns around oversupply remain prominent.”

Dealers said an informal output meeting of OPEC and Russia in Algeria later this month, and further developments in Libya, will be key influences on prices.

The Algeria meeting is expected to tackle the supply glut although many analysts remain doubtful that a deal can be reached to freeze or slash output.

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