U.S. oil futures rebounded Wednesday from steep day-earlier losses as Chinese economic growth, Libyan unrest and a strong U.S. report on domestic oil inventories combined to deliver the strongest gain in more than a month.
Light sweet crude futures for August delivery rose $1.24, or 1.2%, to $101.20 a barrel on the New York Mercantile Exchange, their largest one-day jump since June 12. The gain pushed prices back above $100 a barrel, after they fell below that threshold on Tuesday for the first time since May 9, and arrested a month-long slide that knocked 6.5% off the market before Wednesday's rise.
The market opened the day higher after China reported stronger-than-expected economic growth in the second quarter, and militant battles for control of the airport in Libya's capital city of Tripoli raised concerns about the country's ability to export its restored oil production.
But the strongest gains came after the U.S. reported a drawdown in domestic oil stockpiles of 7.5 million barrels, far more than analyst estimates of 2.6 million barrels and the 4.8 million-barrel projection of industry trade group American Petroleum Institute. Refineries ran at a stronger rate than expected and gasoline inventories rose less than expected.
"It's not piling up in storage," said Phil Flynn, an executive at wholesale brokerage Price Futures Group. "If they can produce that much product and not build inventories then it's obvious that there's demand somewhere."
The data and other factors had analysts suggesting that the long slide in oil prices may be arrested, at least for the moment.
"We do feel that [U.S. oil] has likely established an interim bottom, with more support likely at around $100," research consultancy Ritterbusch & Associates said in a note.
The global Brent contract lost 17 cents, or 0.2%, to $105.85 a barrel, on the last day of trading for the expiring August contract.
China's economy grew at a 7.5% rate in the second quarter, above expectations and better than the 7.4% rate in the first quarter. China is the world's second-largest oil consumer behind the U.S., and any indication of economic expansion there could be bullish for demand.
Libya's national oil company said production has reached its highest level in five months at 600,000 barrels a day, but intense militia battles over the capital airport in Tripoli raised questions about political stability and the nation's ability to export oil out of the country.
Front-month August reformulated gasoline blendstock, or RBOB, lost 1.61 cents to $2.8824 a gallon, as analysts said the strong refinery runs likely panicked gasoline investors who fear a robust increase in supplies in future data releases. August diesel rose 0.23 cent to $2.8578 a gallon.