World oil prices stage rally
Oil prices rallied Tuesday, reversing earlier losses in volatile and low-volume trade, with sentiment supported by the weaker dollar and equity markets, despite poor eurozone and US consumer confidence data.
Brent North Sea for delivery in October leapt $1.47 to $113.35 in late afternoon deals, as London traders returned after a bank holiday on Monday.
New York's main contract, West Texas Intermediate (WTI) for October soared $1.07 to $88.34 a barrel.
"The market continues to push higher in low volume trading this afternoon, underpinned by renewed dollar weakness while equity markets also held up, even though downbeat US consumer confidence limited gains," said VTB Capital analyst Andrey Kryuchenkov.
"The market is bracing itself ahead of this week's all important US non-farm payrolls (on Friday), as well as August Manufacturing PMIs on both sides of the Atlantic as well as China.
"The market is also watching developments in Libya, but fundamentally little changed since last week in quiet post-bank holiday trading in London."
In earlier choppy deals, the oil market slid on the back of falling stock markets and the stronger dollar.
Oil traders meanwhile shrugged off news of tumbling consumer confidence in both the eurozone and the United States.
US consumer confidence plunged in August to the lowest level in more than two years as consumers worried about the economy amid a political standoff over the nation's debt, a key survey showed Tuesday.
The Conference Board said its consumer confidence index tumbled almost 15 points from July, to 44.5, the lowest reading since April 2009.
Across in Europe, consumer and business confidence in the eurozone economy slumped in August, falling for the sixth consecutive month, an EU survey showed.
The Economic Sentiment Indicator (ESI) fell by 4.7 points to 98.3 in the 17-nation eurozone compared to 103 points in July. In the wider 27-nation EU, the ESI fell by 5.0 points to 97.3.
In reaction, the European single currency dived as low as $1.4385, but clawed its way back above $1.44 after the US data.
Oil prices had risen in earlier Asian trade on the back of hopes that the US economy will be able to find a way out of its slump without more monetary stimulus, analysts said.
Last week, US Federal Reserve chief Ben Bernanke voiced expectations the economy would grow in the second half of the year after near-stagnant growth in the first six months.
Bernanke's speech in Jackson Hole, Wyoming, in which he also made no new announcement of monetary stimulus, was interpreted as a sign of confidence in the world's largest economy, which is also the biggest oil consumer.
"Nothing new was said by Bernanke so sentiment on the broader market (is) still shaky," added Kryuchenkov on Tuesday.
Oil futures gained ground on Monday as investors reacted to news of rebounding consumer spending in the United States, which is the world's leading oil-consuming nation.
Analysts meanwhile noted that Hurricane Irene had caused no major damage to the US petroleum industry.
© 2011 AFP