Friday, May 6, 2011

Oil prices rebound after nosedive

Analysts expect oil prices to continue the upward trend

Source: Press TV

The US crude price has recovered from a sharp drop to climb above USD 100 per barrel due to rising demand and continued unrest in major oil exporters.

The US crude oil was up 28 cents at USD 100.08 on Friday. ICE Brent crude for June rose 74 cents to USD 111.54 a barrel, after falling as much as 55 cents earlier in the session.

Brent was down USD 10.39 on Thursday at USD 110.80 a barrel, the second biggest drop on record and the fourth straight day of losses, Reuters reported.

Analysts say rising demand from emerging economies and concerns about further supply disruptions as a result of unrest in the oil exporters in North Africa and the Middle East put a floor under prices on Friday.

"We are seeing a turnaround in oil prices, and that probably means that the sell-off was too much and too fast," said Victor Sum, an analyst at Purvin & Gertz.

"The geopolitical issues that made oil prices rise so much in the past few months still remain with us. I don't see any aggressive exit from oil right now,” he added.

Strong Asian demand and supply concerns were likely to keep Brent around USD 120-USD 125 a barrel, analysts said.

"This looks like a relief rally following the broader sell-off in commodities. It could go down further; all eyes will be on the US non-farm payrolls data," said Serene Lim, a commodities analyst with ANZ Bank in Singapore.

The markets on Friday will focus on the release of US jobs data for the latest pointer to the health of the world's largest economy after weak macro-economic data contributed to a freefall in the oil markets on Thursday.

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