Brent climbs above $100 after selloff
Singapore, April 17, 2013
Brent crude rebounded above $100 per barrel on Wednesday as a steep drop over the past five sessions attracted bargain hunters, while hopes the US Federal Reserve will maintain its monetary stimulus after recent weak data also supported prices.
But gains were capped by concerns about oil demand growth after bleak economic reports from the world's top oil consumers, the United States and China, which pushed Brent to below $100 for the first time since July in the previous session.
Brent crude for June delivery gained 31 cents to $100.22 a barrel by 0643 GMT, after dropping to a session low of $98 on Tuesday, the weakest since July 2012.
US crude for May delivery slipped 7 cents to $88.65 a barrel, off a 4-month low of $86.06 hit on Tuesday.
"I think at this stage we are seeing a bit of bargain hunting," said Ben Le Brun, analyst at OptionsXpress in Sydney.
"But oil prices are going to be dictated by economic data that we see coming out of the US and obviously the (Federal Reserve) quantitative easing program is still in place so that should at least underpin some support for commodity prices."
He added that broader concerns on the state of the global economy remained in the market, capping oil price gains.
US consumer prices fell in March for the first time in four months and factory output slipped, strengthening the argument for the Federal Reserve to maintain its monetary stimulus to speed up economic growth.
A rise in US March housing starts to the highest since 2008 was a bright spot, but insufficient to turn oil sentiment bullish.
The International Monetary Fund on Tuesday trimmed projections for global economic growth for this year and next to take into account sharp government spending cuts in the United States and the latest struggles of recession-stricken Europe.
The recent fall in oil prices showed that the market is sufficiently supplied, said Maria van der Hoeven, executive director of the International Energy Agency.
Van der Hoeven also said she hoped the fall in oil prices would help the global economy recover. -Reuters