Oil prices stabilised in early trading on Thursday after hitting fresh 2003 lows the session before, but analysts said a persistent global glut would keep pressuring markets.
US oil futures crashed below $27 dollars a barrel on Wednesday for the first time since 2003, caught in a broad slump across world financial markets as traders worried that a huge oversupply in crude was coinciding with an economic slowdown, especially in China.
WTI, Brent crude
On Thursday, oil prices stabilised, with front-month West Texas Intermediate (WTI) crude futures trading at $28.66 per barrel at 0155 GMT, up 31 cents from its previous close.
International benchmark Brent was up 37 cents at $28.25.
Yet broader market sentiment remained bearish as producers around the world pump 1-2 million barrels of crude every day in excess of demand, creating a huge storage overhang. At the same time, concerns are growing that China's economy could slow further, hitting demand.
“Lower commodity and oil prices reflect weakening demand,’’ HSBC said on Thursday.
ANZ bank said prices were likely to come under more pressure after the release of the US Energy Information Administration’s official storage data later in the day.