Oil futures settled back above $39 a barrel on Tuesday, bouncing back from their lowest level in 6 ½ years, as China’s decision to cut interest rates gave the market an extra boost.West Texas Intermediate crude for October delivery CLV5, -0.28% climbed $1.07, or 2.8%, to settle at $39.31 a barrel on the New York Mercantile Exchange. October Brent crude LCOV5, -0.30% on London’s ICE Futures exchange added 52 cents, or 1.2%, to $43.21 a barrel.
Data issued last week showing a rise in U.S. oil drilling rigs has helped drive crude’s fall in recent days, but some analysts say that can’t continue forever, with oil now under $40. That could temper some fears about oversupply.
As long as the price stays below the $40, it is likely that the rig count will drop, said Naeem Aslam, chief market analyst at AvaTrade, in a note Tuesday. “This will dent the U.S. shale-oil supply, and crude oil could see a bounce on the back of this in the next quarter or so.”
On Monday, WTI settled down 5.5% at $38.24 a barrel, the lowest level for a most-active contract since February 2009, as traders fretted over the prospects for global economic growth and energy demand.
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