NEW YORK: Crude oil jumped nearly 5 percent yesterday as important chart support prices held fast after nearly a week of selling, leading to technical buying that turned the market around abruptly.
Both Brent and US crude oil futures jumped more than $3 a barrel in late morning trade, extending slight gains made after earlier data showing a drop in US crude inventories last week.
“I think it was triggered by some short-covering, and once it gets going it feeds upon itself,” said John Saucer at Mobius Risk Group in Houston. Buying accelerated after the market failed to make a new low despite news that stockpiles at the US storage hub at Cushing, Oklahoma jumped nearly 3 million barrels, Saucer said.
Preset buy-stop orders were triggered on the way up, said Saucer. Brent’s next technical level was at $63.50, or 10 cents below yesterday’s peak. Brent for February delivery was up $2.33 at $62.34 a barrel by 1815 GMT, after hitting a session high at $63.40. US crude’s front-month contract rose $1.90 to $57.83 after a climbing earlier to $58.98.Reuters
