LONDON: Oil climbed towards $102 a barrel yesterday as the market bounced off a 16-month low hit in the previous session, although ample supplies and lingering demand worries limited the rally.
A weaker dollar and expectations of a decline in US crude stocks supported oil prices, which on Tuesday had plummeted in reaction to a sharp gain in the dollar and concerns over slowing oil demand growth in China and Europe.
Brent crude was up $1.60 at $101.94 by 1355 GMT after settling at its lowest since May 1, 2013 on Tuesday. US crude traded up $1.26 at $94.14 after settling down $3.08 from Friday’s close. Monday was a US holiday.
“You would expect the market to bounce after such a major downward move yesterday,” said Tony Machacek, a broker at Jefferies in London. “Fundamentally, the oil market is well supplied and the indications are prices are still in a downtrend.”
The dollar slipped against a basket of currencies. The currency on Tuesday rose to its highest since July 2013, pressuring oil prices as a firmer dollar makes oil more expensive for holders of other currencies.
Investors have mostly discounted threats to supplies from conflict in the Middle East and north Africa, focusing instead on the lack of further disruption to oil flows in Iraq and rising output in Libya.
Reuters
