Crude oil futures up on firm demand

Budget threatened as oil price sinks to $56

Brent Oil Price Drops Below $58 per Barrel for First Time in Six Months

West Texas Intermediate crude rebounded Thursday after the Saudi efforts were revealed, following Wednesday's 4.7% plunge.

Crude for September contracts delivery also edged higher by Rs 90, or 2.46 per cent, to Rs 3,748 per barrel with a business volume of 680 lots.

Brent crude LCOc1 was up 83 cents at $57.06 a barrel by 1326 GMT, after hitting a session high of $58.01.

The further decline in oil prices followed an unexpected build in U.S. crude supplies and fears of lower crude demand due to the deepening trade tensions.

"Demand was universally stronger, in all regions".

On the strength of IEA data showing that demand to May from January grew at its slowest since 2008, hurt by mounting signs of an economic slowdown and intensification of the U.S.

Saudi Arabia, the world's largest oil exporter, has already cut production more than required under the agreement between the Organization of Petroleum Exporting Countries and allies outside of the group.

Reports that Saudi Arabia, the world's biggest oil exporter, had called other producers to discuss the slide in crude prices have helped supported the market, traders and analysts said.

Emily Ashford, executive director of energy research at Standard Chartered, said she would not read too much into a "short-term rise" on Thursday as it could be a correction to a sell-off that was "a little too extreme".

"While the oil markets are focused on trade negotiations and demand, the current unprecedented amount of US production is probably the in the market", said Ellen Wald, president of Transversal Consulting and Investing.com contributor.

"Oil prices have clawed back some losses, but the sentiment remains overly bearish", Stephen Innes, managing partner at VM Markets, said in a note.

The bank lowered its 2019 price outlook, mostly because of demand concerns, forecasting that global oil supplies will exceed consumption in the first half of next year.

Looking ahead, the risk sentiment will remain the main market driver for risk assets such as oil, with the Yuan recovery having alleviated currency war fears and triggered risk-on market profile.

It said that tensions in the Persian Gulf, where some oil tankers have been attacked amid a diplomatic standoff between the USA and Iran in particular, have heightened concerns.

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