World oil prices rebounded slightly today as traders went bargain-hunting, and after the International Energy Agency upgraded its forecast for global demand.
New York's main contract, West Texas Intermediate (WTI) light sweet crude for July delivery, added 39 cents to $95.20 a barrel. Brent North Sea crude for August won $1.41 to $114.42 a barrel in London on the contract's first trading day.
Analysts said that commodity traders were buying up crude after its overnight dip. Crude futures had plunged dramatically yesterday to below $95 a barrel in New York as investors fretted about fresh signs of weakness in the US economy and tensions in Greece which sent the dollar jumping.
But prices won modest support this morning after the IEA raised its global oil demand forecast for 2011 by 0.1 million barrels a day to 89.3 million.
The Paris-based IEA added that it sees demand rising to 90.63 million of barrels a day in 2012, an increase of 0.6 million from its previous forecast that was given in December.
The run in oil prices has largely been driven by fundamentals of supply and demand, with emerging markets set to keep stoking demand and keep prices above $100 a barrel, it added.
The agency also hiked its medium-term price assumption by $15-$20 a barrel, with an average price of $103 a barrel now underpinning its forecasts.
New York crude prices had dived more than $4.50 in late US trade yesterday, sinking below $95 as investors fretted about the US economy and the Greek debt crisis.
Data from the US released yesterday showed manufacturing conditions in New York falling into negative territory for the first time since November 2010 as inflation rates soared to their highest level in more than two and a half years.
Markets had also been rattled by the failure of euro zone finance ministers to reach an accord in Brussels on Tuesday on a second bail-out package aimed at averting a Greek debt default, sending the dollar sharply higher against the euro.
