Oil surges in best day since 2009 – by Jeff Lewis (Globe and Mail – August 28, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

CALGARY – Oil prices surged more than 10 per cent as world stock markets recovered from a sharp sell-off, lifting Canadian energy shares despite lingering concerns over wobbly Chinese demand and a worldwide supply glut.

In a sharp reversal, West Texas intermediate oil on Thursday jumped 10.3 per cent after U.S. oil inventories posted a surprise drop of 5.5 million barrels and data showed stronger U.S. economic growth. WTI closed at $42.56 (U.S.) a barrel. Brent, the global benchmark, rose $4.42 to settle at $47.56 a barrel.

The rally capped a string of losses that saw U.S. oil prices touch a 2009 low of $37 a barrel this week as fears over China’s economic health sent global markets into a tailspin.

The S&P/TSX capped energy index, composed of oil producers and service company providers, climbed 6.6 per cent as investors bought into a market that analysts said was oversold.

“It looks like a deserved correction to me,” said Jim Ritterbusch, president of Chicago-based Ritterbusch & Associates, although oil prices are unlikely to stage a sustained recovery.

“Nothing’s really changed on the fundamental front,” he said. “This is all a process of following global equity markets around like a puppy dog. If the stock markets stay strong around the world, we’ll disconnect to the downside.”

Supporting prices were a revision to U.S. annual gross domestic product growth to 3.7 per cent, up from 2.3 per cent reported last month. At the same time, however, U.S. government data showed a 1.7-million-barrel increase in gasoline supplies, stoking concerns about shaky demand just as U.S. refiners head into maintenance season.

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