(Bloomberg) -- Oil rallied after technical measures signaled its recent slump — driven by concerns about a US economic slowdown and a weak 2025 outlook — was overdone.
West Texas Intermediate rebounded 1.5% to settle above $73 a barrel after a four-day slump that brought futures close to oversold territory on the relative strength index. Earlier in the session, equities rallied after the latest jobless claims data showed the labor market is cooling gradually instead of rapidly slowing. Equities have since pulled back.
The recent rout comes against a backdrop of twin concerns about supply and demand. The OPEC+ alliance is due to begin adding supplies back to the market next quarter, but the International Energy Agency sees inventories swelling next year even if the coalition holds off on plans to increase output.
At the same time, continued weakness in China, the world’s largest crude importer, is compounding fresh concerns about the US economy. Economic data released Thursday also painted a bleak picture for manufacturing in Europe.
Traders are now focusing on a policy symposium in Jackson Hole, Wyoming, where Federal Reserve Chair Jerome Powell is due to speak on Friday, adding greater detail on the state of the economy.
The selloff Wednesday came even as figures showed US crude inventories fell to the lowest since January. Distillate and gasoline holdings also dropped.
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