Brent crude climbed from the lowest level in almost four years on speculation prices decreased more than justified. West Texas Intermediate rebounded after falling below $80 for the first time since June 2012.
Futures advanced as much as 1.2% in London after falling below $83 for the first time since November 2010. Crude has tumbled on concern that a global supply glut is forming. Gasoline rose after U.S. government data showed that stockpiles of the fuel slipped last week as demand increased.
“The market is exhausted after a tremendous decline,” Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC, said by phone. “We’re not moving on fundamentals at the moment. This is a probably a brief technical recovery.”
Brent for November settlement, which expires today, increased 97 cents, or 1.2%, to $84.75 a barrel on the London-based ICE Futures Europe exchange at 12:59 p.m. in New York. Futures earlier reached $82.60, the lowest since November 2010. The more-active December contract climbed 2.4% to $86.10. The volume of all futures traded was 17% above the 100-day average for this time of day.
WTI for November delivery gained 96 cents to $82.74 a barrel on the New York Mercantile Exchange. It earlier touched $79.78, the least since June 29, 2012. Volume was 48% higher than the 100-day average.
The 14-day relative strength index for Brent was 15.0892 today and has been below 30 since Sept. 30, according to data compiled by Bloomberg. An RSI below 30 typically signals a market is oversold. The RSI for WTI stood at 23.8582.
Gasoline supplies dropped 3.99 million barrels to 205.7 million last week, an Energy Information Administration report showed today. Stockpiles were projected to have fallen by 1.7 million barrels, according to the median of 11 analyst responses in the Bloomberg survey.
Consumption of the motor fuel rose 1% to 8.72 million barrels a day averaged over the last four weeks, EIA data show.
“The gasoline draw is putting the on the market for the moment,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “That was a bigger than expected decline in supply and demand over the last four weeks is up strongly.”