Oil rises to near $87 after 7 percent weekly fall
The price of oil rose to near $87 a barrel on Thursday as some traders sought to buy back into the market, which has plunged 7 percent in the past week.
By early afternoon in Europe, benchmark crude for December delivery was up 96 cents to $86.69 a barrel in electronic trading on the New York Mercantile Exchange.
On Wednesday, the contract dropped 94 cents, or about 1 percent, to finish at $85.73 per barrel after the U.S. reported an unexpectedly large increase in crude supplies.
The Energy Department said U.S. oil supplies grew last week by 5.9 million barrels, or 1.6 percent. At 375.1 million barrels, the nation's oil inventory is 11.1 percent above year-ago levels.
"The release of the weekly EIA oil inventories report surprised the markets, raising serious concerns about the levels of the oil demand," said a report from Sucden Financial Research in London.
Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne, said traders were seeing an opportunity for bargains after recent price plunges. The oil price has dropped almost 7 percent since closing last Thursday at $92.10.
"The markets have been heavily sold in the last couple of weeks," he said. "Oil looks like one of the cheaper commodities in the markets."
Gains on stock markets also provided a boost to oil prices as traders' mood was lifted by encouraging quarterly results from key companies, such as consumer products company Unilever and Swiss bank Credit Suisse.
In London, Brent crude was up $1.18 to $109.03 per barrel on the ICE Futures exchange.
In other futures trading in New York:
— Wholesale gasoline rose 2.48 cents to $2.6161 per gallon.
— Natural gas lost 0.1 cent to $3.44 per 1,000 cubic feet.
— Heating oil added 2.36 cents to $3.05 per gallon.
Pamela Sampson in Bangkok contributed to this report.