West Texas Intermediate advanced 2% in a move traders characterized as a technical correction following crude’s descent into oversold territory. The jump came even as US oil inventories rose 8.85 million barrels last week and one measure of gasoline demand plunged below seasonal 2020 levels.

“Crude is trying to bounce off the lowest levels since March as the last two weeks’ selloff in prices stemmed from a perceived slowdown in both Asia and Europe with expectations that demand destruction is coming,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Crude’s tumble in recent days has seen it break out of the trading range it’s been in for much of the summer. Futures have been trading below key moving averages and forming bearish technical patterns that compounded the recent sell-off. Monetary tightening and concerns about an economic slowdown have also weighed on the market.

“The rising US dollar to multi-year highs has been a big bearish factor to crude and with the Fed set to raise interest rates again, the strength looks to continue,” said Kissler. That along with China locking back down has “spooked” the energy sector.

Meanwhile, the Biden administration is weighing the possibilty of another release from the Strategic Petroleum Reserve to stave off an oil-price spike when EU sanctions on Russian supplies take effect this winter.

Still, the WTI prompt timespread, an indicator of market tightness, widened Thursday after oil inventories at the Cushing, Oklahoma, storage hub declined for a second week. In another bullish signal, the Energy Information Administration raised its outlook for global oil demand Wednesday, while also cutting the forecast for US supply.

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