Oil prices rebound amid expectations on potential supply cut

Gas prices: News about oil that will impact what you pay at the pump

Concerns jumped early last week when China retaliated by dropping its currency below the psychological 7 yuan to the dollar level and canceling all agricultural deals it had with the United States. The deteriorating economic situation prompted rate cuts this week in New Zealand, India and Thailand amid concern there could be a recession.

Brent crude futures LCOc1 were down $2.38, or 4%, at $56.56 a barrel by 10:36 a.m. CDT (1536 GMT), setting a fresh seven-month low.

Stocks at Cushing fell almost 2.4 million barrels in the week to August 2, traders said, citing data from market intelligence firm Genscape.

US crude inventories grew by 2.39 MMbbl within the week through August 2, correlated with the medial estimate for a 2.7 MMbbl decline in a Bloomberg survey.

USA crude oil production will reach record level in 2019 and 2020, according to the EIA on Tuesday.

In its monthly report, the IEA cut its forecasts for global oil demand this year and next due to projections of a weakening economy world-wide.

Global oil-consumption growth was the weakest since 2011 in the first quarter, at just 310,000 barrels a day, amid a manufacturing lull in China and elsewhere, according to the Paris-based International Energy Agency. That constitutes a downward revision of 100,000 b/d for this year and 50,000 b/d for next year.

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"The market continues to grow more uncertain about the demand outlook given the deterioration of trade talks between China and the US", ING analysts said in a note. "There aren't many tools in the tool-box other than faster and deeper cuts", said Bob McNally, president of Rapidan Energy Group and a former oil official at the White House under President George W. Bush.

"One of the world's largest crude suppliers saying they'll try to re-balance the market is providing traders some comfort", said Michael Loewen, director of commodity strategy at Scotiabank. This is the event that could provide support for the market this week.

Bounce capped by bearish US EIA Crude Stocks data, US-China trade worries. There are two sides to the market.

The overnight recovery in the barrel of WTI can be largely attributed to reports that Saudi Arabia, the world's biggest oil exporter, had called other producers to discuss the slide in oil prices.

Oil prices were generally down following a sluggish session opener Wednesday, with dark clouds ahead to the global markets courtesy of the US-China trade conflict seen by many market observers to get more complicated.

The minister said the OPEC and non-OPEC ministerial monitoring committee would meet in Abu Dhabi on September 12 to review the oil market.

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