Oil rebounds as financial markets steady after Turkey turmoil

Oil price has rebounded Tuesday as global financial markets stabilize following an easing of the initial panic over Turkey’s economic meltdown.

Brent for October settlement advanced 93 cents to $73.54 a barrel on the London-based ICE Futures Europe exchange, and traded at a $6.10 premium to WTI for the same month. The global benchmark crude had declined 20 cents to $72.61 on Monday.

West Texas Intermediate crude for September delivery traded at $68.11 a barrel on the New York Mercantile Exchange, up 91 cents, at 8:52 a.m. local time. The contract fell 43 cents on Monday. Total volume traded Tuesday was about 29 percent below the 100-day average.

In the U.S., crude inventories probably fell by 2.5 million barrels last week, according to the Bloomberg survey of analysts before government data due Wednesday. Stockpiles in the nation’s storage hub in Cushing, Oklahoma, probably increased by 500,000 barrels.

Futures in New York added 1.4 percent, recouping Monday’s losses. Many developing-nation currencies, which tumbled following the collapse of Turkey’s lira, recovered on Tuesday. In the U.S., crude stockpiles probably extended declines last week, according to a Bloomberg survey.

The lira’s dive in recent weeks has prompted a rather muted reaction among commodities, though other threats to global growth — such as a trade war between the U.S. and China — continue to damp confidence. Oil-supply risks remain, and crude futures have kept within a narrow range this month as traders weigh potential losses from Iran against increased OPEC production.

“Today the Turkish lira is strengthening, so the market is breathing a bit easier, lowering the shoulders a little bit,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. Concern now shifts from demand to supply as Iranian sanctions loom, he said.

Meantime, reports say Libya’s oil output has risen to more than 1 million barrels a day. Production from its biggest field, Sharara, is back to normal after dropping last month when an armed group kidnapped staff.

In Delhi, officials there say India may agree to cut Iranian oil purchases by half if the U.S. allows a waiver on sanctions and lets it continue importing, people familiar said.