Oil prices stage strong rebound

8th October 2015, Comments 0 comments

The oil market rallied Thursday as dealers took their cue from the stronger dollar and upbeat comments from the head of the OPEC cartel of crude producers.

Brent North Sea crude for delivery in November added $1.93 to stand at $53.20 per barrel in late afternoon London deals.

US benchmark West Texas Intermediate for delivery in November won $1.82 to $49.63 per barrel compared with Wednesday's close.

In foreign exchange, the euro rose to $1.1282 from $1.1237 late on Wednesday in New York, as cautious investors awaited direction on the outlook for US borrowing costs.

The US Federal Reserve is set to release the minutes of its last monetary policy meeting with analysts looking for signs on whether it would raise interest rates starting this year or next.

A weaker US currency helps bolster oil prices as the dollar-priced commodity becomes cheaper for holders of weaker units, spurring demand, analysts said.

Traders were mulling upbeat remarks by Abdalla Salem El-Badri, secretary-general of the Organization of the Petroleum Exporting Countries, who stated that demand will rise more than projected this year.

"World oil demand is estimated to increase by 1.5 million barrels per day in 2015, higher than the initial projection," El-Badri said in a statement to the International Monetary Fund.

"In 2016, improvement in global economic activities is anticipated to support world oil demand to grow by 1.3 million barrels per day."

Prices had tumbled Wednesday after a US Department of Energy report showed commercial crude stockpiles rose more than expected in the week ending October 2, indicating softer demand in the world's top oil consuming nation.

Stockpiles rose by 3.1 million barrels, more than the market estimate of 2.25 million barrels. That brought inventories to 461.0 million barrels, more than 27 percent higher than a year ago.

US production, which had fallen by 40,000 barrels per day in the previous week, unexpectedly surged by 76,000 barrels per day, dousing hopes of an easing in the global crude oversupply.

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© 2015 AFP

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