Reuters reported that oil prices rose after sliding by around 15% so far in May but investors were concerned about global growth prospects after a slew of weak economic data.
ICE Brent for July was up 40 cents at USD 111.24 by 1258 GMT. UScrude futures for June delivery rose 11 cents to USD 97.48 per barrel on the day of the front month expiry.
Mr Andrey Kryuchenkov of VTB Capital said that the market continues to consolidate after recent volatility. This is a bottom for the short term. The risk premium for further supply disruptions in the Middle East has now been almost wiped out, limiting scope for further falls.
The war in Libya has nearly halted its oil exports but political unrest has not led to supply disruptions in other OPEC member states. Trading volumes on US crude have fallen so far this week in a move that some analysts took as a sign of uncertainty about price direction with liquidity less than half the multi year highs hit in the immediate aftermath of the crash in early May.
Reuter’s data showed that US oil prices are set for their biggest monthly price drop since January 2009 and have been volatile since falling 10% in a single session. Daily volatility based on data from one market close to the next has flattened in the last couple of sessions but is still near 25 month highs.
A preliminary Reuter’s poll ahead of weekly industry and government reports showed on Monday, US crude inventories likely rose for the fourth straight week as higher imports outpaced refinery demand. Crude inventories were expected up 1 million barrels in the week to May 13 and gasoline stocks were seen up 1.1 million barrels. If confirmed, this could stoke a further sell off in RBOB gasoline futures after 5% slide within days of the start to the US peak summer driving season.
Traders watched for a further rise in inventories at the US delivery point of Cushing, Oklahoma which hovered just below record highs. Fears that rising water levels on the Mississippi River would affect eight refineries in Louisiana have abated following news the US Army Corps of Engineers began opening flood gates.
