Connect to share and comment

Oil prices climb in technical rebound

PlacardEnlarge
(Globalpost/GlobalPost)

Global oil prices rose on Monday, in line with the weaker dollar and rebounding equities, as the market recovered from the impact of last week's poor US jobs report, analysts said.

Brent North Sea crude for delivery in May won 98 cents to $105.10 per barrel at about midday in London.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for May, added 71 cents to $93.41 per barrel.

Crude futures had plunged on Friday following the weaker-than-expected jobs report in top crude consumer the United States.

Brent oil had nosedived as low as $103.62 per barrel -- the lowest point since late July 2012.

"Crude oil prices rebounded on Monday and started the week on the positive side supported a weaker US dollar that spread upside momentum to the oil market," said Myrto Sokou, senior research analyst at Sucden brokers in London.

She added that in "Japan, the economic conditions remain fairly tentative with the yen hitting almost a four-year low against the US dollar this morning, continuing its sharp decline following confirmation that the Bank of Japan would begin buying longer-dated bonds immediately in order to beat deflation."

The weaker greenback makes dollar-priced crude cheaper for buyers using stronger currencies. That tends to stimulate demand.

Tokyo stocks soared 2.80 percent Monday as the yen plunged further following the Bank of Japan's sweeping monetary easing last week.

The BoJ on Thursday embarked on a new era of huge spending by releasing a flood of easy money, its boldest attempt to drag the Japanese economy out of decades of crushing deflation.

But a dismal US jobs report released Friday that fell far short of market expectations continued to weigh on sentiment.

The Labor Department said the United States added just 88,000 jobs in March, compared with forecasts for about 200,000. The unemployment rate dipped to 7.6 percent from 7.7 percent in February, but only because people dropped out of the workforce.

"Brent sunk to an eight month low on Friday, taking a hit from tumbling equities after a disappointing US jobs report for March," said VTB Capital analyst Andrey Kryuchenkov.

"In reality though, the US non-farm payroll report served just as another excuse to extend the ongoing correction in crude at a time when there is little fundamental support or investor interest in the market," he added.

burs-rfj/wai

http://www.globalpost.com/dispatch/news/afp/130408/oil-prices-climb-technical-rebound