WSJ:OIL FUTURES: Crude Recovers Slightly, But Nymex Still Below $92/Bbl
By Eric Yep
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Crude-oil futures recovered slightly in Asia Monday, tracking a stronger euro and as Iran is back in focus ahead of talks later this week with six world powers.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $91.76 a barrel at 0653 GMT, up $0.28 in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose $0.65 to $107.79 a barrel.
The head of the International Atomic Energy Agency, Yukiya Amano, arrived in Iran Monday on an unscheduled visit. On Wednesday, Iran will hold talks with the five permanent members of the U.N. Security Council plus Germany.
"We think Brent prices may receive some support ahead of the second round of nuclear talks with Iran this Wednesday. However, we would expect oil prices to remain under pressure due to European debt concerns," ANZ said in a note.
At a G-8 summit over the weekend, leaders failed to agree on measures for resolving the escalating economic crisis in Europe, though a final statement did affirm that they wanted Greece to remain in the euro zone.
Uncertainly in Europe continues to keep the oil market on edge as a deteriorating economy would lower fuel demand and prices. Chinese and European manufacturing data for May later this week will provide further cues.
Oil prices Monday found support in a steadier euro against the U.S. dollar and on comments over the weekend by Chinese Premier Wen Jiabao, raising hopes for further fiscal and monetary easing from Beijing to avoid an economic slowdown.
Nymex crude settled at its lowest level this year Friday, having fallen for six straight sessions on macroeconomic worries and high oil supply. Nymex crude is likely to consolidate after hitting a near-seven-month low of $90.84 a barrel this morning, Dow Jones technical analysis shows.
The extent of the recent selloff in oil was largely unwarranted and supply is tightening again with more Iranian crude oil shut out, which will raise prices, Goldman Sachs said in a May 18 note.
The bank is bullish on oil and maintains its three-month and 12-month Brent targets at $120.00 a barrel and $129.00 a barrel, respectively, and Nymex at $115.00 a barrel and $125.00 a barrel, respectively.
Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 165 points to $2.9060 a gallon, while June heating oil traded at $2.8491, 191 points higher.
ICE gasoil for June changed hands at $909.50 a metric ton, up $1.75 from Friday's settlement.
-By Eric Yep, Dow Jones Newswires; +65 6415 4063; eric.yep@dowjones.com