Oil rebounds from five-month low
Wednesday, 19 May 2010
NEW YORK, May 18 (Bloomberg): Crude oil rose after dipping below $70 a barrel to a five-month low in New York yesterday, on forecasts that demand is picking up in the US
Oil snapped five days of losses before a US Energy Department report tomorrow that's forecast to show refinery operating rates increased and gasoline inventories dropped as summer driving season approaches.
Yesterday, futures fell 2.1 per cent on concern Europe's sovereign-debt crisis may derail the global economic recovery and reduce consumption.
"Seventy has been a support line," said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland. "There's still some downside risk but we think prices are close to their fundamental value. We'll still depend a little bit on what happens with equities and the dollar."
Crude oil for June delivery gained as much as $1.83, or 2.6 per cent, to $71.91 a barrel in electronic trading on the New York Mercantile Exchange, and was at $71.73 at 11:01 a.m. London time. Brent crude oil for July delivery was up $1.35 at $76.45 on the London-based ICE Futures Europe exchange.
Yesterday, the New York contract fell as much as $2.34 to $69.27 a barrel and closed at $70.08, the lowest settlement since Dec. 14.
The dollar was at $1.2406 against euro, compared with $1.2395 in New York yesterday. The euro fell toward its lowest since April 2006 on speculation the European debt crisis will undermine the 16-nation region's economic recovery.
Refineries probably operated at 88.6 per cent of capacity last week, up 0.2 per centage point from the previous week, according to the median of analyst responses before the Energy Department report.
Gasoline supplies declined 1 million barrels from 222.1 million the prior week, according to the Bloomberg survey. US crude oil stockpiles probably increased by 625,000 barrels, the 15th time in 16 weeks as imports climbed.
"We've come from having oil at $87 a barrel to around $70 per barrel," said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. "Those who have already factored in a weak outlook for the euro zone, or don't think that there's the risk of another financial crisis happening, seem to think this is not such a bad time to buy.
Oil snapped five days of losses before a US Energy Department report tomorrow that's forecast to show refinery operating rates increased and gasoline inventories dropped as summer driving season approaches.
Yesterday, futures fell 2.1 per cent on concern Europe's sovereign-debt crisis may derail the global economic recovery and reduce consumption.
"Seventy has been a support line," said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland. "There's still some downside risk but we think prices are close to their fundamental value. We'll still depend a little bit on what happens with equities and the dollar."
Crude oil for June delivery gained as much as $1.83, or 2.6 per cent, to $71.91 a barrel in electronic trading on the New York Mercantile Exchange, and was at $71.73 at 11:01 a.m. London time. Brent crude oil for July delivery was up $1.35 at $76.45 on the London-based ICE Futures Europe exchange.
Yesterday, the New York contract fell as much as $2.34 to $69.27 a barrel and closed at $70.08, the lowest settlement since Dec. 14.
The dollar was at $1.2406 against euro, compared with $1.2395 in New York yesterday. The euro fell toward its lowest since April 2006 on speculation the European debt crisis will undermine the 16-nation region's economic recovery.
Refineries probably operated at 88.6 per cent of capacity last week, up 0.2 per centage point from the previous week, according to the median of analyst responses before the Energy Department report.
Gasoline supplies declined 1 million barrels from 222.1 million the prior week, according to the Bloomberg survey. US crude oil stockpiles probably increased by 625,000 barrels, the 15th time in 16 weeks as imports climbed.
"We've come from having oil at $87 a barrel to around $70 per barrel," said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. "Those who have already factored in a weak outlook for the euro zone, or don't think that there's the risk of another financial crisis happening, seem to think this is not such a bad time to buy.