Dec. 27 (UPI) -- Crude oil prices were lower Thursday morning after a short rally in the previous session -- which followed sharp losses on Christmas Eve -- with the future outlook still gloomy due to oversupply concerns.
As of 7:12 a.m. EST on Thursday West Texas Intermediate futures were 1.3 percent lower at $45.64 per barrel, while Brent futures traded 1.5 percent lower at $53.94 per barrel as of the same time.
WTI futures on Wednesday rose 8.7 percent to $46.22 per barrel, while Brent futures rose 7.9 percent to $54.76 per barrel.
Brent is still much lower than its peak for the month on Dec. 4 at $62.08 per barrel, and from its annual peak of over $86 per barrel in early October. On Friday, Brent closed at $54.10 per barrel, just ahead of sharp losses in the holiday-shortened Monday trading, ahead of the Christmas holiday on Tuesday.
"With the dramatic oil selloff on Christmas Eve it was not surprising to see the move higher yesterday, especially with the S&P move. We got to an extremely oversold level," Tariq Zahir, managing member of investment-advisory firm Tyche Capital Advisors, told UPI.
The Standard & Poor's 500 index on Wednesday rose just under 5 percent to 2,467.70 points. Prior to that it had declined 16 percent from a high on Sept. 20 at 2,930.75 points.
Equity fell in recent months due to reasons that include concerns about rising interest rates and the potential negative impact of a trade dispute between the United States and China. Similar concerns have also affected the crude market -- with less economic activity there would be less crude oil demand.
However, the crude oil market is seeing an additional concern related to the market becoming oversupplied, particularly due to production increases in the United States.
As we go forward "the strength in the U.S. dollar and paring of the gains we are seeing this morning and away from the extremely oversold conditions, we feel we could see the energy markets drift lower especially on the heels of last week's dramatic increase in rig counts," Zahir added.
"With EIA data on tap tomorrow, if we see an increase in crude inventories we wouldn't be surprised to see oil trade through the lows we saw the other day, especially if we see the S&P and other risk on markets give up the gains that were seen in yesterday's session," he added,
The Energy Information Administration will release data on United States crude oil inventories on Friday morning, later than usual because government offices were closed earlier this week.