NYMEX crude oil rebounds in Asia on China's move to spur economy

Investing.com - Crude oil prices rebounded in Asia on Thursday as investors bet a cut in the amount of cash banks hold as reserves in China will spur demand.

Late Wednesday in Asia, the People’s Bank of China announced that it lowered the amount of deposits banks are required to hold as reserves to 19.5% from 20.0%, in an effort to boost lending and spur economic activity in the world’s second largest economy.

On the New York Mercantile Exchange, crude oil for delivery in March rose 0.60% to trade at $48.90 a barrel.

Overnight, West Texas Intermediate oil futures extended heavy losses on Wednesday, after data showed that oil supplies in the U.S. rose to the highest level on record, exacerbating fears over a glut in supplies.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 6.3 million barrels in the week ended January 30, higher than expectations for an increase of 3.5 million barrels.

Total U.S. crude oil inventories stood at 413.1 million barrels as of last week, the most in records dating back to August 1982.

The report also showed that total motor gasoline inventories increased by 2.3 million barrels, compared to expectations for a gain of 0.1 million, while distillate stockpiles rose by 1.8 million barrels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery tumbled $2.27, or 3.93%, to trade at $55.64 a barrel on Wednesday.

Capital expenditure cuts by major oil companies combined with a sharp reduction in U.S. rig counts are helping support prices amid hopes it will alleviate a glut in global supplies.

London-traded Brent prices have fallen sharply in recent months as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.