FX.co ★ Crude Oil Rebounds

On Thursday, WTI crude oil futures experienced a recovery of over 1.5%, rising to above $56.9 per barrel. This increase followed a two-day downturn as market participants reevaluated immediate supply risks in light of stronger U.S. physical balances. A significant factor in this movement was an unexpected reduction of 3.8 million barrels in U.S. crude inventories, defying predictions of an increase and alleviating worries about ample worldwide supply. Additionally, concerns regarding Venezuelan oil supply resurfaced after the U.S. government announced intentions to tighten control over crude sales and strengthened sanctions by confiscating Venezuelan-linked tankers. Comments from President Trump on the possible transfer of Venezuelan crude to the U.S. highlighted longer-term supply risks, though practical and logistical challenges tempered any downward pressure. Meanwhile, price gains were limited by growing inventories at Cushing and substantial increases in gasoline and distillates, although weaker U.S. labor statistics continued to support demand expectations due to a more accommodating Federal Reserve outlook.