European oil futures rose towards $99 a barrel on Wednesday, undergoing a slight correction from Tuesday’s losses after Norway’s government ordered an end to a strike which was threatening to cut off over 2 million barrels per day.
“I do not think the rise today is due to fundamentals. It is a slight recovery after the sharp drop yesterday, so it is more of a correction,” said Carsten Fritsch, an analyst at Commerzbank in Frankfurt.
Oil fell more than 2 percent on Tuesday after Norway’s strike was ended by the government and as China cut oil imports in June, reinforcing fears of a global economic slowdown hurting fuel demand.
Norway, the world’s eighth largest oil exporter, restarted some major oil and gas fields on Tuesday after the government ordered late on Monday an end to a 16-day strike by offshore workers, averting a total production shutdown.
Statoil will restart the Oseberg field centre, an important transport hub for Brent crude in the North Sea, before the weekend.
Brent crude for August delivery rose 84 cents to $98.81 a barrel by 1021 GMT.
US crude was at $84.68, up 77 cents, after rising over $1 a barrel and hitting a high of $85.00.
“The rise is a technical bounce. The market is waiting for statistics for further direction,” said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas in London.
“If EIA and API data match then the result will be fairly neutral on prices.”
US inventory data from the US Energy Information Administration is expected to show crude stocks shrinking for a third week in the world’s largest oil consumer.
But another round of cuts by the US Energy Information Administration to its world oil demand growth forecast for 2012 and 2013 limited gains for oil prices.
China is due to release GDP data later this week that could show the weakest expansion in three years. If confirmed, the figures could help support oil as investors expect the government to introduce measures to boost the economy.
“Demand for commodities should start to rebound in response to China’s implementation of investment projects,” ANZ analysts said in a note.
Traders are expected to scour EIA data to be released later on Wednesday after statistics from the American Petroleum Institute showed a 695,000 barrel fall in U.S. crude inventories in the week to July 6, compared with a forecast for a 1.2 million barrel decline in a Reuters poll of analysts.
A third week of falls for US crude stocks will be “supportive for the oil market, but is unlikely to have a large impact as inventories are still high,” Ken Hasegawa, a commodity sales manager at Newedge Japan.
US gasoline demand fell over the last two weeks as motorists faced economic uncertainty, a MasterCard report showed.