By Christopher Alessi
LONDON--Oil prices ticked up slightly Thursday morning after closing at a three-week low Wednesday.
Brent crude, the global benchmark, was up 0.74% at $61.67 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.50% at $56.24 a barrel.
"This is just a technical rebound after yesterday's fall," said Eugen Weinberg, head of commodity research at Commerzbank AG.
Brent and WTI fell by 2.9% and 2.6% respectively Wednesday, after the U.S. Energy Information Administration released weekly data showing a 6.8 million barrel increase in gasoline inventories for the week ended Dec. 1, as well as record U.S. crude production of 9.7 million barrels a day for last week.
Mr. Weinberg said he expected prices to continue to fall in coming months on rising U.S. oil output. "The most important factor is not OPEC, it's shale production from the U.S.," he said.
The dip in prices comes nearly a week after the Organization of the Petroleum Exporting Countries agreed with other major producers, including Russia, to extend an agreement to curb crude oil output by nearly 2% through the end of next year. Prices received only a minor boost following the decision, as an extension had been largely priced in by the market.
OPEC and 10 producers outside the cartel first agreed a year ago to cap production at 1.8 million barrels a day below peak October 2016 levels, with the aim of both alleviating a global supply glut that has weighed on the market since 2014 and boosting prices.
Crude prices have risen more than 20% since September amid stronger compliance with the OPEC-led deal, along with growing global demand and renewed geopolitical risks in the Middle East.
"Last week's OPEC/non-OPEC meeting now looks like ancient history," said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd., in a note Thursday. "The meltdown that took place yesterday, however, provided us with a warning signal that it is not only OPEC and its 10 non-OPEC allies that play an important role in the formation of oil prices," he added.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was down 3.35%, at $1.66 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $547.50 a metric ton, up 0.09% from the previous settlement.
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