Oil rallied in early Wednesday trade in Asia after the biggest two-day slump in a month as U.S. industry data showed the pace of crude stockpile growth slowed amid a glut.
Futures advanced as much as 2 percent in New York after falling 5.6 percent the previous two sessions, the biggest two-day slide since Feb. 11. Inventories expanded by 1.5 million barrels last week, the American Petroleum Institute reported. That’s the smallest registered increase by the API in four weeks. Output from government-operated Kirkuk fields in Iraq was halted for a third day.
There’s evidence of a decline in U.S. output and the drill rig count continues to edge lower. A combination of those factors and the wildly oversold nature of the market mean that there will be more stability in the markets.
Oil has rebounded after slumping to a 12-year low this year on speculation a global surplus will ease amid stronger demand and falling U.S. output. American crude stockpiles probably rose by 3.2 million barrels last week, according to a Bloomberg survey before government data Wednesday. That would keep supplies at the highest level in more than eight decades.