Oil rebounds despite easing Libya concerns

3rd April 2014, Comments 0 comments

Global oil prices rebounded Thursday, reversing earlier losses as dealers set aside an expected return of Libyan supplies and awaited tomorrow's key US non-farm payrolls data, analysts said.

New York's West Texas Intermediate (WTI) for delivery in May advanced 43 cents to $100.05 per barrel.

Brent North Sea crude for May climbed $1.03 to stand at $105.82 a barrel in late afternoon deals in London.

"Crude futures have reversed earlier losses, with Brent moving solidly to the upside on strong volume and WTI jogging along," said Addison Armstrong, director of market research at Tradition Energy.

"Brent has found strength after falling to its lowest level in five months, and despite reports that the Libyan government and rebels who have blocked oil exports are close to an agreement that would reopen some export facilities."

New York prices also won support as dealers awaited Friday's key non-farm payrolls numbers, which are a key indicator of economic strength in the world's biggest oil consuming nation.

"The US oil contract has found some support. This could be due speculators trimming some of their bearish positions ahead of the nonfarm payrolls tomorrow," said Forex.com analyst Fawad Razaqzada.

The North African state of Libya, a member of oil producing cartel OPEC, may be close to reaching a deal with rebels who have blockaded oil terminals since July, according to reports.

Rebels demanding autonomy for eastern Libya said Thursday they had made progress in talks with the central government on reopening key oil ports that they closed to exports last July.

A rebel spokesman said a first port might reopen as early as next week, raising hopes of an end to the nine-month blockade which has slashed Libyan oil exports from 1.5 million barrels a day to just 250,000 in a massive blow to the economy.

"The Libyan government is reportedly close to finalising a deal with rebels to reopen key oil ports, ending an eight-month standoff that saw oil exports from Libya plummet," said analyst Gary Hornby at British energy consultancy Inenco.

"A deal could be struck within the next 2 to 3 days, which could see Libyan oil exports boosted by approximately 600,000 barrels-per-day, quadrupling current export levels."

The oil market had edged lower on Wednesday, with Brent hitting a five-month low as traders also digested poor global economic data that has sparked concerns over the demand outlook.

Prices were hit by weak purchasing managers index (PMI) readings for the manufacturing sectors in China, the eurozone and the United States this week.

"Recent mixed economic data from the US, Asia and eurozone have weighed on market sentiment, raising some concerns about a possible slowdown in the oil demand for the short-term," said Sucden analyst Myrto Sokou.

"Following the recent tepid PMI manufacturing data, the outlook for the global manufacturing sector remains quite gloomy."

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© 2014 AFP

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