NEW YORK: Oil prices rose in volatile trading yesterday, with some investors betting a powerful rally from Friday had put a bottom to the seven-month long rout on the market even as others remained pessimistic.
Benchmark Brent crude was up $1.45 at $54.44 a barrel by 1720 GMT, swinging between a session high of $55.62 and low $51.41. US crude was up $1.12 at $49.36 a barrel, moving between $50.56 and $46.67. Benchmark Brent and US oil futures swung in a band of about $4 a barrel, one of their widest in weeks, as near-term technical signals indicated further gains while fundamental data continued to weigh on the market. The spread between the two oils widened to above $5 a barrel, its biggest since November.
Traders said oil services company Genscape estimated a stock build of 2.3 million barrels in the Cushing, Oklahoma, delivery point for US crude last week, adding to already record-high inventories in the country.
A US refinery strike, which theoretically meant higher crude supplies in the market, and disappointing US consumer spending and manufacturing data also knocked oil prices off their early highs. “People are very, very skittish,” said analyst Chandravir Ahuja of Kolmar Americas Inc in Bridgeport, Connecticut. “I don’t think anything’s changed fundamentally, except for the psychology of the market,” Ahuja said, “and we’re moving a lot more on headlines that we probably would on a normal day.” “I think people were trying to play off again on Friday’s rally on the assumption that the market’s found a bottom, but I don’t think that’s the case yet,” said Tariq Zahir, managing member of Tyche Capital Advisors in Laurel Hollow, New York.
Prices jumped 8 percent on Friday, the biggest daily gain since 2009 for Brent. Reuters
