RTRS: Oil steadies below $46 after near 9 percent fall
Oil steadied below $46 a barrel on Tuesday, pausing after an almost 9 percent fall a day earlier as traders awaited more cues on demand from U.S. economic, corporate and oil inventory data.
The focus is back on the state of the economy in the world's biggest energy consumer after Bank of America (BAC.N), the largest U.S. bank, posted a jump in bad loans, sending equity markets and most commodities down.
Shares on Wall Street and Asia fell sharply, but European shares were firmer in early trade on Tuesday as energy companies recovered some ground lost in the previous session. .EU
Bonds and other traditional safe-haven assets such as gold jumped as investors fretted a sharp rally in global stocks since early March could be over.
U.S. crude for May delivery, which expires later in the day, edged up 5 cents to $45.93 a barrel by 0845 GMT, after plunging $4.45 on Monday. London Brent crude rose 44 cents to $50.30.
"Oil fundamentals are not tight enough to carry crude above $55 a barrel and as soon as the combined support of strong equities and weak dollar goes missing then crude oil starts to move back," Petromatrix analyst Olivier Jakob said.
Strength in the dollar contributed to oil's sharp fall on Monday, as dollar-priced commodities become more expensive for holders of other currencies.
The Chicago Board Options Exchange Volatility Index .VIX, Wall Street's barometer for fear, jumped more than 15 percent on Monday, the largest daily percentage gain since January 20.
Oil has been trading in a tight band between $46 and $55 for the past month, after rallying steadily since mid-February from the mid-$30s, helped by hopes of economic recovery and optimism over OPEC's compliance with agreed supply cuts.
The Organization of the Petroleum Exporting Countries meets again on May 28 to discuss output levels.
Iran's OPEC governor said on Tuesday the producer group may decide to further cut its oil output if the oil market continued to remain oversupplied, and expressed concern consumer countries are stockpiling oil due to lower prices.
"OPEC may decide to further cut its output in its next meeting if the market remains oversupplied," Mohammad Ali Khatibi told reporters on the sideline of Iran's International Oil and Gas exhibition.
"Consumer countries are increasingly stockpiling oil."
The producer group has cut member output quotas by 4.2 million barrels per day since September in a bid to underpin prices as the global slowdown has cut demand.
Despite OPEC's efforts, crude oil inventories in the United States have risen to the highest level since September 1990.
