Oil prices rally after massive pullback

Oil prices gained on Friday, recovering some of the massive losses in the previous session. The West Texas Intermediate for September delivery rose 1.71 U.S. dollars to settle at 55.66 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery climbed 1.39 dollars to close at 61.89 dollars a barrel on the London ICE Futures Exchange, agency reports.

The move followed a bloodbath on the oil market in the previous session, with the U.S. crude benchmark and the international benchmark on Thursday plunging nearly 8 percent and 7 percent, respectively, as renewed concerns over global trade clouded the outlook for economic growth and energy demand. “Yesterday’s reaction fits in well with the pattern that we have been observing for months, namely that the oil market is ‘deaf in one ear’ and responds mainly to bearish news,” energy analysts at Commerzbank said in a note on Friday. Flow of crude through the Strait of Hormuz, a key strait between the Persian Gulf and the Gulf of Oman, has been at risk amid the ongoing tensions between Iran and the West in the region.

Earlier this week, competent U.S. authority reported a larger-than-expected drop in domestic crude inventories. In the week ending July 26, U.S. commercial crude oil inventories decreased by 8.5 million barrels from the previous week, the U.S. Energy Information Administration said Wednesday. Analysts polled by S&P Global Platts, on average, expected a decline of 3.9 million barrels.