NEW YORK: Oil prices spiked abruptly at midday on Thursday, extending an early bounce from new four-year lows as a combination of technical buying and options expiry for US crude triggered a sudden frenzy of buying.
Markets had gained earlier in the day, led by a pick-up in gasoline futures after data showed US stockpiles fell to their lowest level in two years, and as some traders bet that a more than 25 percent slump since June had been overdone.
At around 1700 GMT, the market suddenly surged by as much as $3 a barrel, a move traders said was fuelled by investors covering positions tied to US WTI options trades, which expire later in the day, as well as automatic buy-stops.
December Brent crude was up $2.18, or 2.6 percent, to $86.30 a barrel, putting it on track for the biggest one-day gain since the market began a lengthy slide in mid-June. Expiring November Brent rose 47 cents to $84.25 a barrel.
US November crude rose $1.37 to $83.15 a barrel, off the intra-day high of $84.83 a
barrel. Reuters
