Brent oil Wednesday briefly slipped below $50 a barrel for the first time since 2009, but crude finished higher on a strong day for US and European equity markets.
European benchmark Brent oil for delivery in February gained five cents to $51.15 a barrel in London after earlier sliding to another 5.5-year low at $49.66 a barrel.
US benchmark West Texas Intermediate for delivery in February advanced 72 cents to $48.65 a barrel on the New York Mercantile Exchange.
Analysts said the oil market benefited from better investor sentiment towards riskier investments. US and European stocks jumped following strong US trade and jobs data and weak European inflation figures that lifted speculation of more monetary stimulus from the European Central Bank.
The oil market “got a little bit of a boost because the stock market is up pretty substantially,” said Phil Flynn, analyst with the Price Futures Group.
About 30 minutes before the closing bell, US stocks were up about one percent.
Flynn said oil also received some support from a US Department of Energy inventory report that showed crude supplies dropped 3.1 million barrels last week.
At the same time, Flynn said higher inventories of gasoline and distillate products “were kind of disappointing.”
Analysts cautioned against reading much into Wednesday’s rise in oil prices given overall supply-demand dynamics.
Oil prices remain under pressure from OPEC’s stance on maintaining its current production levels, market oversupply, weak demand and the strong dollar.
Several analysts said the brief drop in Brent below $50 a barrel could be a harbinger of even lower prices.
“The move below $50 shows how momentum is everything here,” CMC Markets analyst Michael Hewson told AFP.
“With no sign that OPEC will do anything about overproduction, it seems likely that we could well see further declines towards $40 in the coming weeks — particularly given that demand shows no signs of picking up.”