Oil prices rebound from sharp selloff
SINGAPORE, February 10, 2016
Crude oil prices pushed higher on Wednesday after Iran said it was open to cooperation with Saudi Arabia, partly recovering from an 8 per cent fall in the previous session led by concerns over demand and weak equities.
Prices were supported by comments from Iran's oil minister that Tehran is ready to negotiate with Saudi Arabia over the current conditions in global oil markets.
The International Energy Agency (IEA), meanwhile, said the Organization of Petroleum Exporting Countries (Opec) is unlikely to cut a deal with other producers to reduce ballooning output. It predicted the world will store unwanted oil for most of 2016 as declines in US oil output take time.
"Another day of heightened volatility is expected as concerns over global growth prospects remain elevated," analysts at ANZ said in a note.
The front-month Brent contract LCOc1 was 75 cents, or 2.5 per cent, higher at $31.07 a barrel by 0219 GMT (9.19 a.m. EDT). The contract fel for a fourth straight session on Tuesday to end down $2.56, or 7.8 per cent.
US crude for March delivery CLc1 was 58 cents higher at $28.52 a barrel. The contract fell 5.9 per cent on Tuesday to settle $1.75 lower.
Further weighing on prices on Tuesday, the US Energy Information Administration (EIA) lowered its 2016 oil demand growth forecast to 110,000 barrels per day (bpd) from a growth of 160,000 bpd previously.
"Oil remains susceptible to further weakness as the market digests (Tuesday's) data," ANZ said.
Oil investors will turn to weekly inventory data by US Energy Information Administration (EIA) later on Wednesday, with analysts surveyed by Reuters predicting a 3.6 million-barrel rise in crude stocks last week.
The American Petroleum Institute (API), an industry group, reported a build of 2.4 million barrels in US crude stockpiles for last week.
Seeking additional protection against wild swings in prices, oil traders have scrambled to scoop up options, sending a key index to its highest level since the worst of the global economic crisis in 2008, data showed. – Reuters
