MW: Oil rises, recovering a bit from prior session’s drubbing
Crude-oil futures rose early Monday, bouncing back somewhat after enduring their biggest daily drop in three weeks in the prior session.
Light, sweet crude futures for delivery in October CLV5, +1.50% traded at $45.32 a barrel on the New York Mercantile Exchange, up 64 cents, or 1.4%, in the Globex electronic session. November Brent crude LCOX5, +1.69% on London’s ICE Futures exchange rose 55 cents, or 1.2%, to $48.02 a barrel.
Signs that oil supply remains ample kept prices largely in the doldrums last week, with Nymex crude eking out a 0.1% gain after sliding 4.7% on Friday, while Brent crude lost 3.2%. Nymex crude is down about 15% for the year to date.
“The general slow-down in Asian economies, particular China, is also keeping the prices low due to lower demand,” said Virendra Chauhan, an oil analyst at Energy Aspects, adding that while the Federal Reserve’s decision last week to hold interest rates steady was positive news for importers using foreign currencies, “the uncertainty of what’s to come later in the year is a concern for many regional traders.”
On Friday, a Baker Hughes report indicated the U.S. oil-rig count fell by eight to 644 in the last reporting week, the third-straight weekly decline. The rig count is seen as an indicator of future oil production, and is closely watched by market participants given the importance of U.S. supply to global oil balances.
“In the absence of any clear trend, the oil market is likely to remain under the influence of external factors such as the equity and foreign-exchange markets, and to remain volatile,” said Commerzbank commodity analysts in a note Monday. “Nonetheless, we are confident that the incipient decline of production in the U.S. in particular will herald in a long-term and fundamental bottoming out process on the oil market.”
Nymex reformulated gasoline blendstock for October RBV5, +2.15% — the benchmark gasoline contract — rose 2 cents, or 1.3%, to $1.37 a gallon.
