An oil well pump jack is seen at an oil field supply yard near Denver, Colorado February 2, 2015. Reuters/Rick Wilking
Oil prices jumped more than 4 percent on Thursday after a rally in equity markets and an unexpected fall in U.S. crude inventories, but worries over the health of the Chinese economy and a global oil glut kept the outlook uncertain.
World stock markets rallied on Thursday as Chinese shares recovered on hopes that government measures to stimulate the economy would pay off, while the dollar also rallied as risk aversion eased.
Oil markets moved up from six-and-a-half-year lows reached earlier this week, but investors are still worried about a huge oversupply in the oil market which is depressing oil for immediate delivery and filling stockpiles worldwide.
“The trend is strong and down. However, do not be wrong footed by a correction higher,” PVM Oil Associates technical analyst Robin Bieber said. “Few markets head forever in one direction with no respite.”
Front-month Brent, the global oil benchmark, was up $1.75 at $44.89 a barrel by 0930 GMT (5.30 a.m. EDT). U.S. crude was up $1.60 at $40.20 a barrel.
Phillip Futures oil analyst Daniel Ang in Singapore said he saw the current rally as a pause in a downward trend, rather than a longer term shift upwards.
“We would not underestimate the current bearish momentum and still believe that it is possible to see prices break supports of $38 and $45 for WTI and Brent,” Ang&hellip