Oil prices rebound from steep dive

Oil prices rebound from steep dive
Updated 20 May 2015

Oil prices rebound from steep dive

Oil prices rebound from steep dive

LONDON: Oil prices rebounded Wednesday, recovering from recent steep losses in the previous session, in a muted response to news of falling US crude stockpiles.
US benchmark West Texas Intermediate (WTI) for delivery in July rose 90 cents to $58.89 a barrel.
Brent North Sea crude for July gained 95 cents to stand at $64.94 a barrel in London early afternoon deals.
“Crude oil showed an overall muted initial reaction to the (US) supply data,” Forex.com analyst Fawad Razaqzada said.
The US government’s Department of Energy said Wednesday that American crude reserves slid 2.7 million barrels in the week to May 15, in the third successive weekly decline.
That was heavier than expectations for a drop of two million, according to a poll by Bloomberg News.
They still remain near their highest levels on record, however.
“The report was supportive but at the same time we have the threat of additional dollar strength hanging over the market,” cautioned Saxo Bank analyst Ole Hansen.
In addition, the global oil market remained weighed down by abundant US supplies.
“A third consecutive weekly fall in US oil inventories hardly lit a flame to oil prices,” added IG analyst Joshua Mahony.
He added: “With near all-time high levels of crude awaiting release onto the markets, alongside a whole raft of producers waiting to bring their operations back on board, I can only seen further downside in the price of oil in the coming weeks.”
Crude futures had fallen sharply Tuesday as the greenback soared against other major currencies, making dollar-priced oil more expensive and denting demand.
The dollar strengthened against the euro after a European Central Bank official said the bank would ramp up its asset-purchase stimulus program in May and June to offset an expected financial market slowdown in the coming months.
A robust report on US housing construction also lifted the greenback.