On Friday, crude prices surged as market participants had prepared for more price leaps this year in a hope for a tighter physical market. However, renewed indications of an Asian economic slowdown weighed on revenues.
After rebounding above $50 per barrel during Asian trade, Brent crude oil futures traded at $49.96, showing a 25-cent rise from their last settlement. Additionally, U.S. West Texas Intermediate crude futures gained 17 cents, trading at $48.51 per barrel.
Traders told that the higher prices appeared to be the result of a tightening physical market, where the huge oversupply, causing the 2014-2016 price tumble, was being brought back into balance now.
Many financial analysts are assured that the fundamentals of the crude market are still favorable for continued price recovery, and global inventories will start drawing in 3Q.
Notwithstanding, crude output from the OPEC soaring to a record 32.82 million barrels per day in June, the OPEC actually expects demand for its supplies to keep rising.