Oil prices rebound on supply concerns
Oil prices resumed their march higher Tuesday, reversing three days of losses as the market bet on a further drop in US energy inventories.
Despite rising, prices remained far off historic highs of above 100 dollars a barrel that were reached last week.
New York’s main contract, light sweet crude for delivery in February, jumped 98 cents to 96.07 dollars per barrel in electronic deals.
It had struck a record high of 100.09 dollars last Thursday but fell heavily thereafter as traders took profits.
On Monday, Brent North Sea crude for February rallied 83 cents to 95.22 dollars per barrel. Last week it struck an historic peak of 98.50 dollars.
‘We seem to be ... in a very volatile market at the moment, supported by the stock draws in the US,’ said Societe Generale analyst Mike Wittner.
The US Department of Energy was to publish its latest weekly snapshot of American crude stockpiles on Wednesday.
Oil prices had fallen sharply Monday despite the Pentagon reporting a close weekend encounter between the US Navy and Iranian vessels in the strategic Strait of Hormuz.
Traders said prices also declined as some speculators engaged in a bout of profit-taking amid lingering fears that slower US economic growth could dent global energy demand.
Prices had briefly pushed higher after the Pentagon said three US warships had been briefly harassed on Sunday by five Iranian speedboats in the Strait of Hormuz, which is a crucial gateway for global energy supplies.
Iran’s government played down the incident.
The Strait of Hormuz is a vital outlet for world energy supplies because crude exports from oil-rich Gulf Arab countries pass through the strait -- or about 20-25 percent of the world’s crude.
The incident came ahead of US President George W. Bush’s departure Tuesday for the oil-rich Middle East region, intended to boost the Israeli-Palestinian peace process while reiterating to allies that Washington continues to view oil producer Iran as a threat.
The US Labor Department reported on Friday that the economy gained just 18,000 nonfarm jobs in December, marking the slowest pace of job creation since 2003. The unemployment rate rose to 5.0 percent, the highest in more than two years.
Traders predict cautious trade ahead of the next meeting of the Organisation of the Petroleum Exporting Countries on February 1.
Outgoing OPEC president, the United Arab Emirates, said the recent rise in prices to 100 dollars had nothing to do with market fundamentals, the WAM state news agency reported on Monday. Source
Despite rising, prices remained far off historic highs of above 100 dollars a barrel that were reached last week.
New York’s main contract, light sweet crude for delivery in February, jumped 98 cents to 96.07 dollars per barrel in electronic deals.
It had struck a record high of 100.09 dollars last Thursday but fell heavily thereafter as traders took profits.
On Monday, Brent North Sea crude for February rallied 83 cents to 95.22 dollars per barrel. Last week it struck an historic peak of 98.50 dollars.
‘We seem to be ... in a very volatile market at the moment, supported by the stock draws in the US,’ said Societe Generale analyst Mike Wittner.
The US Department of Energy was to publish its latest weekly snapshot of American crude stockpiles on Wednesday.
Oil prices had fallen sharply Monday despite the Pentagon reporting a close weekend encounter between the US Navy and Iranian vessels in the strategic Strait of Hormuz.
Traders said prices also declined as some speculators engaged in a bout of profit-taking amid lingering fears that slower US economic growth could dent global energy demand.
Prices had briefly pushed higher after the Pentagon said three US warships had been briefly harassed on Sunday by five Iranian speedboats in the Strait of Hormuz, which is a crucial gateway for global energy supplies.
Iran’s government played down the incident.
The Strait of Hormuz is a vital outlet for world energy supplies because crude exports from oil-rich Gulf Arab countries pass through the strait -- or about 20-25 percent of the world’s crude.
The incident came ahead of US President George W. Bush’s departure Tuesday for the oil-rich Middle East region, intended to boost the Israeli-Palestinian peace process while reiterating to allies that Washington continues to view oil producer Iran as a threat.
The US Labor Department reported on Friday that the economy gained just 18,000 nonfarm jobs in December, marking the slowest pace of job creation since 2003. The unemployment rate rose to 5.0 percent, the highest in more than two years.
Traders predict cautious trade ahead of the next meeting of the Organisation of the Petroleum Exporting Countries on February 1.
Outgoing OPEC president, the United Arab Emirates, said the recent rise in prices to 100 dollars had nothing to do with market fundamentals, the WAM state news agency reported on Monday. Source
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