Oil prices rebound sharply after fall in early trading

Oil has faced a turbulent day as an initial 1.6 per cent drop was wiped out when prices rebounded in the mid-afternoon.

The price of Brent crude rose by over $2 to around $55.50 within half an hour, later jumping to $56.41, a 4.6 per cent increase over the session.

Worries about oversupply had earlier weighed on the price of oil, sending Brent down around over one per cent to lows of $52.58 per barrel. It is unclear what caused the rebound, David Madden, an analyst at CMC Markets, said.

US standard West Texas Intermediate also jumped 4.7 per cent to $47.53 per barrel.

“Oil has had a volatile session. It sold-off severely, and then rebounded,” Madden said.

“In 2018, Russian oil output hit its highest level in the post-Soviet era, adding to that, according to the Energy Information Administration, US oil production hit a record high in October.

“Fears of oversupply, coupled with fears slowing demand from China are likely to hang over the energy market.”