“If you look back at any analysis of marginal supply and producing oil to get an economic return, certainly current demand can not be met at the current spot price of $45”.
Oil prices gained as data showed China imported more crude in July.
Oil supply and demand are seeking a new equilibrium, Currie said.
Brent for September settlement increased $1.80, or 3.7%, to end the session at $50.41 a barrel on the London-based ICE Futures Europe exchange.
News of rising US production comes as top producing cartel OPEC has refused to cut output, and as investors wait for Iran to ramp up exports after a major deal over its nuclear programme last month.
The global oil market is facing a 2 million barrel a day oversupply, up from 1.8 million in the first half of this year, driven by a surge in production from Saudi Arabia, Iraq and Russian Federation, analysts at Goldman Sachs said in a report last week.
On Monday, the gasoline “crack” CL-RB1=R, or refining margin, hit a one-week high above $26 a barrel.
Brent lost 23 percent of its value in the past six weeks and U.S. crude 26 percent, pushed down by an oil glut.
Besides expectations of faster-than-expected resumption of Iranian output, the increase in the number Oil rigs in US exacerbated the selloff of Crude prices last week. Since the start of August, however, there have been signs that Asian crude demand is slowing.
The unit processes about 240,000 barrels of crude oil a day.
“Devaluation of the yuan means a stronger US dollar and that’s likely to weigh on commodity prices”, Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone.
According to the Secretary General of the OPEC Abdallah el-Badri, oil prices are expected to stabilize next year.
The latest report by US DOE/EIA suggested lower Crude Oil prices have helped refineries.
“All sorts of factors were at work, the Chinese trade data had disappointed on the export front but imports reached record highs in July, partly including oil but all round the world refineries have been flat to the boards so watch out for build up in those markets”, explained industry expert Malcolm Graham-Wood. Early this month, Chinaoil, the trading arm of PetroChina (0857.HK), bought 5 million barrels of crude in just 30 minutes through Asia’s main price-finding mechanism organized by Platts, part of McGraw Hill Financial Inc (MHFI.N).