Oil clawed back some losses after Saudi Arabia contacted fellow crude producers to discuss ways to halt the slide in prices.
Futures in New York rose 2.4% in after-hours trading from Wednesday’s settlement. Bloomberg News reported the Saudis have decided the market slump is intolerable and all options are on the table, according to a kingdom official who asked to not be identified.
As the world’s largest oil exporter, Saudi Arabia largely orchestrated historic output curbs by the Organization of Petroleum Exporting Countries and allies including Russia to prop up prices. Those efforts have been confounded by booming output from American shale fields and looming concerns about the health of the global economy.
West Texas Intermediate oil for September delivery rose $1.23 to $52.32 a barrel in after-hours trading on the New York Mercantile Exchange. That followed a session in which the futures closed at $51.09 a barrel, the lowest level since Jan. 14.
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Futures fell during Wednesday’s session after the Energy Information Administration revealed the first rise in U.S. crude inventories since early June. Oil was also swept up in a global meltdown of stock and commodity markets after rate cuts in New Zealand, India and Thailand escalated recession fears and spurred a flight to U.S. treasuries and other safe havens.
In the U.S., domestic crude inventories expanded by 2.39 million barrels last week, snapping a seven-week string of declines, according to EIA data. Gasoline stockpiles also expanded, an alarming development during what is typically the peak demand season.
The “shocking” increase in U.S. fuel supplies, coupled with a flight from risky assets, means oil “will feel pressure in the days and weeks to come,” said Tariq Zahir, a commodity fund manager at New York-based Tyche Capital Advisors LLC.
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