Oil stabilizes amid firmer Asian demand, Venezuela woes

Oil prices on both sides of the Atlantic halted previous downward momentum and now look to stabilize in Europe, as traders remain wary after a volatile session witnessed a day before.

Brent-WTI spread narrows sharply

Currently, both crude benchmarks trade modestly flat, with Brent and WTI parked in close proximity to $ 50 barrier. The bears took a breather from the recent selling spiral, in wake of increased uncertainty over OPEC’s action on output cut, which even outweighed an unexpected drawdown in the crude inventories.

The US EIA crude inventory report showed that the US crude reserves fell unexpectedly by 600,000 barrels in the week ended Oct. 21, against expectations of a 700,000 barrels build.

The minor-recovery in the black gold seen over the last hour can be mainly attributed to the looming concerns over political stability in Venezuela and re-emergence of oil demand from Asia.

Focus now remains on the USD dynamics ahead of the release of durable goods data from the US later on the day. A stronger USD makes dollar denominated commodity expensive for the holders in foreign currencies and vice-versa.