FOX: Crude Oil Futures Rebound in Wake of Steep Selloff
Light, sweet crude for May delivery recently rose 49 cents, or 0.6%, to $88.50 a barrel on the New York Mercantile Exchange. With the contract set to expire at the close of trading, the more heavily traded June contract rose 42 cents, or 0.5%, to $88.69 a barrel.
Brent crude for June delivery on the ICE futures exchange rose 59 cents, or 0.6%, to $100.24 a barrel.
Monday's move comes on the heels of last week's steep gains, attributed to concerns about weakening oil demand and stabilizing global supply. Brent fell under $100 a barrel for the first time since July.
"Last week, we saw Brent make this aggressive move under $100," said Peter Donovan, vice president at Vantage Trading in New York. "I think guys got the impression that this is a safer spot to come in and buy, at least temporarily."
Signs of weak global oil demand have been a drag on oil prices in recent months, following demand-growth downgrades from the Organization of the Petroleum Exporting Countries, the International Energy Agency and the Energy Information Administration. A number of Wall Street analysts have also cut their outlook on oil prices, citing demand weakness.
However, prices may be approaching a floor, some analysts said. Indications emerged that some OPEC members are uneasy with prices much below current levels. The oil minister of the United Arab Emirates suggested that the oil market is balanced at current levels, and analysts say the UAE's view is normally aligned with that of Saudi Arabia.
Meanwhile, a likely pickup in demand from European refiners as they exit a protracted seasonal maintenance period could also give prices some momentum.
"The global growth downgrade, as well as lower demand projections from the IEA, OPEC and the EIA have all been priced in by now," said VTB analyst Andrey Kryuchenkov in a note. "The recent selloff was overdone and coincided with the seasonal turn-around period."
This week, traders could get additional cues from data on U.S. first-quarter economic growth, as well as Chinese manufacturing data.
Front-month May reformulated gasoline blendstock, or RBOB, rose 0.82 cent, to 0.3%, to $2.7806 a gallon. May heating oil rose 1.57 cents, or 0.6%, to $2.8033 a gallon.
