The price of oil rose to near $88 a barrel Thursday as an unexpected drop in U.S. stockpiles of crude triggered a modest recovery from a sharp sell-off the day before.
By early afternoon in Europe, benchmark oil for May delivery was up $1.20 to $87.88 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.04, or 2.3 percent, on Wednesday — the fourth daily drop of at least 2 percent in April.
A report released Wednesday by the U.S. Energy Information Administration showed U.S. crude inventories falling by 1.23 million barrels in the week ending April 12. A drop in supplies can be due to higher demand but the week to week data is volatile and inventories are still near their highest level since 1990.
Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had been expecting crude stocks to rise by 1.25 million barrels.
Concerns over global economic growth have caused prices to drop sharply over the past week in commodity and stock markets.
The gloom began Monday, when a report of slower-than-expected economic growth in China helped trigger a broad sell-off in commodities that included the biggest one-day drop in the price of gold in 30 years. The International Monetary Fund lowered its outlook for world economic growth this year and the U.S. and several European countries released weak indicators.
Experts predicted oil prices were likely to face headwinds in the coming days.
“Concerns about demand in the wake of recent weaker economic figures from the U.S. and China, the two biggest consumers of oil, and the increase in U.S. oil production to its highest level since July 1992, are weighing on market sentiment,” said a report from Commerzbank in Frankfurt. “As a result, more financial investors are likely to withdraw from the oil market, thereby exacerbating the price slide.”
In London, Brent crude, which is used to price oil used by many U.S. refiners, was up $1.26 to $98.95 on the ICE Futures exchange.
In other energy futures trading on Nymex:
— Gasoline rose 3.4 cents to $2.7545 per gallon.
— Natural gas fell 1.2 cents to $4.202 per 1,000 cubic feet.
— Heating oil rose 4.19 cents to $2.7765 a gallon.
Pamela Sampson in Bangkok contributed to this report.