Oil rebounds in Asia after steep falls
Singapore : Oil prices edged up today on bargain-buying and a weaker dollar after another slump fuelled by a surge in US stockpiles and worries about an upcoming meeting to tackle a global supply glut.
Both main contracts slumped more than three per cent yesterday after Russia suggested it may not be necessary to limit production, denting hopes for its gathering with OPEC in Algeria this month.
The losses meant crude had lost a tenth of its value from its August highs, making it ripe for traders looking for bargains.
At about 0330 GMT the US benchmark West Texas Intermediate (WTI) for delivery in October was up 27 cents, or 0.63 per cent, at USD 43.43 and Brent crude for November climbed 32 cents, or 0.70 per cent, to USD 45.77.
Traders now have their eyes on the release later today of US jobs figures, which will be pored over for an idea about what the Federal Reserve plans to do with interest rates.
Expectations for a hike in borrowing costs have swirled since last Friday when Fed boss Janet Yellen indicated the economy was strong enough for a hike.
That, in turn, fuelled a rally in the dollar, which has dented oil prices as it makes the commodity more expensive to anyone holding other currencies.
However, the greenback retreated yesterday after a surprise plunge in a gauge of US factory activity raised questions about the economy.
“Some rebound is expected after the sharp falls as investors adjust positions ahead of the US non-farm payrolls release and the weekend,” said IG Markets Singapore analyst Bernard Aw.
He added: “The medium-term outlook remains dim for crude oil.”
Oil entered a bull market last month — a 20 per cent rise from recent los — on hopes that Russia and OPEC would be able to reach a deal after agreeing to the Algiers meeting.