Global oil prices bounced back on Wednesday from the worst drop in three years.
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West Texas Intermediate [WTI], which measures the U.S. and Brent, a global barometer, rebounded after the American Petroleum Institute (API) said on Tuesday that U.S. crude inventories last week fell by 1.5 million barrels, easing concerns that a supply glut is building up.
U.S. oil prices fell to fresh lows on Tuesday amid a broader market sell-off and ongoing concerns that production is outpacing demand.
President Trump credited the U.S. relationship with Saudi Arabia for partly dialing back prices and on Wednesday tweeted oil can go even lower.
Global oil prices fell into a bear market earlier this month, plunging more than 20 percent from their October peak. Crude oil posted a record 12 straight session declines earlier this month. Prices at the pump have also declined giving drivers a break on Thanksgiving, the busiest travel day of the year.
Concerns about overproduction have roiled the oil market. The U.S. Energy Information Administration said last month that production would be higher than expected in both 2018 and 2019. Other factors weighing on oil prices were anxiety over whether OPEC will agree at its Dec. 6 meeting to cut production and the high number of exemptions being granted to the U.S. sanctions on Iran.
Falling oil prices hit energy stocks which in turn contributed to Tuesday’s market drop. The selling erased annual gains for the Dow Jones Industrial Average and the S&P 500. The Nasdaq Composite held onto fractional gains for the year. Stocks attempted a rebound on Wednesday ahead of the Thanksgiving holiday.