Oil trades above $91, recovering from big drop
Oil price rebounds above $91 a barrel on ECB interest rate cut after drop on large supplies
In this Thursday, March 7, 2013, photo, an oil pump works at sunset in the desert oil fields of Sakhir, Bahrain. The price of oil dropped more than 2 percent Wednesday, May 1, 2013 after disappointing economic news from the world’s two biggest oil-consuming nations. Benchmark oil for June delivery was down $2.40, or 2.6 percent, to $91.06 a barrel in morning trading on the New York Mercantile Exchange. (AP Photo/Hasan Jamali)
The price of oil made gains above $91 per barrel Thursday, rebounding from a steep drop, as the European Central Bank cut its key interest rate to a new low.
By early afternoon in Europe, the benchmark oil contract for June delivery was up 48 cents to $91.48 a barrel in electronic trading on the New York Mercantile Exchange.
The European Central Bank cut its benchmark interest rate to 0.5 percent from 0.75 percent at its meeting in Bratislava, Slovakia, on Thursday. The effects of the rate cut remain to be seen, but traders saw it as an encouraging step supporting the economy and possibly leading to increased oil demand.
On Wednesday, the Nymex contract plunged $2.43 after a sharp increase in American crude stockpiles and data from the U.S. and China that showed factory production in both countries growing at a slower pace in April.
The U.S. Energy Department said Wednesday that crude inventories expanded by 6.7 million barrels last week, nearly five times the increase analysts expected, to 395.3 million barrels.
Meanwhile, U.S. oil production, at 7.3 million barrels per day, is the highest it's been in 20 years.
Investors are also waiting for the Labor Department to report on Thursday how many Americans applied for unemployment benefits last week. The figures will help further assess the health of the world's largest economy.
Brent crude, which is used to set prices of oil from the North Sea used by many U.S. refiners, was up 85 cents to $100.80 per barrel on the ICE Futures exchange in London.
In other energy futures trading on the New York Mercantile Exchange:
— Wholesale gasoline gained 0.74 cent to $2.7267 a gallon.
— Heating oil added 2.25 cents to $2.8114 a gallon.
— Natural gas rose 2.2 cents to $4.348 per 1,000 cubic feet.
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Pamela Sampson in Bangkok contributed to this report.
