Crude oil markets jumped as much as 5% on Dec. 1, rebounding from five-year lows with their biggest daily gain since 2012, on fears that the high US shale output blamed for the global oil glut may be shrinking, Reuters said.
A weaker dollar, which makes commodities denominated in the greenback more affordable to holders of other currencies, also fueled buying in oil and other natural resource markets.
Benchmark Brent crude oil settled up $2.39 at $72.54 a barrel, after a session peak at $72.73. It fell as much as $2.62 earlier to $67.53, a low since July 2009. The 3% gain on the day was Brent's largest since October 2012.
US crude finished up $2.85 at $69 a barrel, after initially plumbing a five-year bottom at $63.72. The 4% rise was the largest one-day move up in US crude since August 2012. Reuters reported that US crude continued to surge post-settlement, gaining almost 5% to $69.34 by 2015 GMT.
Data reviewed by Reuters on Dec, 1 showed the new low-price environment for oil might have started affecting US shale production, with a 15% drop in permits issued for new shale wells in October.
A Reuters Breakingviews column noted that shale output may not fall as quickly as thought, as producers "have ways to keep the oil flowing, including diverting investment to more productive fields and stepping up efforts to cut already rapidly falling costs."
Brent and US crude prices have fallen for five months in a row, the longest losing streak in oil since the 2008 financial crisis. Despite the Dec. 1 rebound, they are still down about 10% from the start of last week, before OPEC decided on Nov. 27 not to cut output despite oversupply worries. Saudi Arabia, the most influential member of OPEC, blocked moves by some smaller producers to curb output, arguing that low prices would ultimately hurt US shale oil.