Connect to share and comment

Oil prices stage rebound

PlacardEnlarge
(Globalpost/GlobalPost)

World oil prices rebounded slightly on Thursday as traders hunted for bargains after sharp falls caused by concerns over slowing Chinese economic growth and weak energy demand, analysts said.

Brent North Sea crude for delivery in June jumped 91 cents to trade at $98.60 a barrel in late London deals. In earlier Asian trading, the contract slumped to $96.75 -- the lowest level since July 2 last year. Brent meanwhile on Tuesday fell under $100 a barrel for the first time in nine months.

New York's main contract, light sweet crude for May climbed 70 cents to $87.38 a barrel.

"The optimism of the first quarter of 2013 (shown by markets) is nowhere to be seen," said Tamas Varga, analyst at PVM oil brokers.

"It was the US that supported risky assets in the first three months of the year and it is the US that is responsible for the change in the sentiment. Disappointing job data turned the mood sour in April and of course the downgrading of China by Fitch and lower-than-expected Chinese GDP growth are not helping either.

"Throw in the negative global services and manufacturing data and the Cyprus/eurozone financial troubles and you'll end up with the perfect cocktail for a bear market," Varga added.

Official data released this week showed that China's gross domestic product slowed to 7.7 percent in the first quarter of this year, fuelling fears a recent pick-up in the world's number-two economy is faltering.

Concerns over a weaker energy demand also set in after the International Energy Agency and Organization of the Petroleum Exporting Countries lowered their global demand forecasts last week.

"At long last a little reality. Revisions in GDP and global forecasts for growth are all coming in line and lower," Jonathan Barratt, chief executive officer at Barratt's Bulletin in Sydney, told AFP.

"We still have significant bumps in the road in terms of recovery and the market is finally realising this."

burs-bcp/rl

http://www.globalpost.com/dispatch/news/afp/130418/oil-prices-stage-rebound