Oil edges up above $89, recession concerns weigh
Oil nudged above $89 a barrel on Monday, taking back some losses from the previous session as worries over a possible US economic recession continued to weigh.
US light crude for March delivery rose 33 cents to $89.29 a barrel by 0845 GMT, after falling more than 3 percent on Friday.
London Brent crude climbed 45 cents at $89.89.
Oil found some support from a rebound in world equity markets but crude traders and analysts were becoming increasingly bearish for at least the short-term.
Stock markets in Tokyo, Hong Kong, Seoul and Taiwan rose between 2 and 4 percent while Shanghai climbed 8 percent. In Europe, markets also opened higher.
“Oil prices have begun to track global equity markets a lot closer in the last few sessions so this could be explain the rebound in prices this morning,” said Rowan Menzies, head of research at Commodity Warrants Australia in Sydney.
“But in the longer term, oil prices are expected to fall further because of a slower US economy. I think the market will be seeing a few more knocks in the coming months.”
Oil prices fell by nearly $3 on Friday after a government report showed US employers cut 17,000 jobs in January, the first decline in 4-1/2 years and the latest signal that all was not well in the world’s biggest economy.
Mounting US economic problems, including high energy costs, have prompted analysts to cut forecasts for oil demand growth and helped cut crude prices by more than 10 percent from the record $100.09 hit Jan. 3. Oil has hovered near $90 for the past three weeks.
Crude speculators on the New York Mercantile Exchange trimmed net long positions last week, according to data from the Commodity Futures Trading Commission released Friday.
Net crude long positions fell to 29,845 in the week to Jan. 29, the lowest level since mid-November. (Reuters)
US light crude for March delivery rose 33 cents to $89.29 a barrel by 0845 GMT, after falling more than 3 percent on Friday.
London Brent crude climbed 45 cents at $89.89.
Oil found some support from a rebound in world equity markets but crude traders and analysts were becoming increasingly bearish for at least the short-term.
Stock markets in Tokyo, Hong Kong, Seoul and Taiwan rose between 2 and 4 percent while Shanghai climbed 8 percent. In Europe, markets also opened higher.
“Oil prices have begun to track global equity markets a lot closer in the last few sessions so this could be explain the rebound in prices this morning,” said Rowan Menzies, head of research at Commodity Warrants Australia in Sydney.
“But in the longer term, oil prices are expected to fall further because of a slower US economy. I think the market will be seeing a few more knocks in the coming months.”
Oil prices fell by nearly $3 on Friday after a government report showed US employers cut 17,000 jobs in January, the first decline in 4-1/2 years and the latest signal that all was not well in the world’s biggest economy.
Mounting US economic problems, including high energy costs, have prompted analysts to cut forecasts for oil demand growth and helped cut crude prices by more than 10 percent from the record $100.09 hit Jan. 3. Oil has hovered near $90 for the past three weeks.
Crude speculators on the New York Mercantile Exchange trimmed net long positions last week, according to data from the Commodity Futures Trading Commission released Friday.
Net crude long positions fell to 29,845 in the week to Jan. 29, the lowest level since mid-November. (Reuters)
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