Investing.com - Oil bounced back on Thursday, recovering most of the prior day’s decline, as traders weighed opposing price signals but analysts warned that concerns over demand for oil would prevail over other bullish factors such as Middle East tensions.
New York-traded West Texas Intermediate crude futures gained 84 cents, or 1.5%, to $56.72 a barrel by 7:54 AM ET (11:54 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., rose 92 cents, or 1.5%, to $64.10.
U.S. crude ended Wednesday with a 1.6% decline despite a plunge of nearly 11 million barrels in U.S. stockpiles. Normally a bullish factor, analysts attributed the larger-than-expected drawdown to fallout from Hurricane Barry, which forced the shutdown of more than half of the regular oil production from platforms in the U.S. Gulf of Mexico for at least two days.
“Signs that the demand for oil will weaken in the future are mounting and are playing a crucial role in keeping oil prices depressed in the market today,” Ellen Wald, president of Transversal Consulting and Investing.com contributor, said.
Wald pointed to the fact that the International Energy Agency recently cut its oil demand growth forecast due to the slowing global economy while Reuters reported that energy consultancy FGE also lowered its 2019 global oil demand growth among a string of recent downward revisions.
A series of purchasing manager index readings in the U.S. and Europe that were weaker than expected only served to add to the gloomy economic outlook.
“Macroeconomic indicators and a lack of optimism that the trade war between the U.S. and China will be resolved are major factors driving market sentiment now and outweighing concerns that the supply of oil from the Middle East could be disrupted,” Wald said.
She added that flow of crude through the Strait of Hormuz has yet to be affected by tensions between Iran and the West and concluded that “geopolitical risk has already been priced into the oil market”.
In other energy trading, gasoline futures advanced 1.3% to $1.8797 a gallon by 7:59 AM ET (11:59 GMT), while heating oil rose 0.8% to $1.9247 a gallon.
Lastly, natural gas futures traded up 0.5% to $2.232 per million British thermal unit.
-- Reuters contributed to this report.