Oil market firms after choppy week

26th September 2014, Comments 0 comments

Oil prices rose slightly on Friday, striking a stable note after diving earlier this week to two-year lows on fears over ample supplies and weak demand.

The market won modest support heading into the weekend on worries over US-led airstrikes against jihadists in the oil-rich Middle East.

Brent North Sea crude for delivery in November gained 28 cents to stand at $97.28 a barrel in London midday deals.

US benchmark West Texas Intermediate for November added 42 cents to $92.95 a barrel.

"Oil prices remain virtually unchanged as compared with yesterday despite some pretty volatile trading," said Commerzbank analysts in a note to clients.

"There is a clear lack of any impetus to drive any price recovery, however."

Later on Friday, traders will pay close attention to the latest economic growth data in the United States, the top global crude consuming nation.

"On the macroeconomic front, the main focus will switch to the release of the US GDP data," added Sucden analyst Myrto Sokou.

The oil market was weak on Thursday, buffeted by the strong dollar and rebounding Libyan output.

Recovering Libyan exports have added to the oversupply. Light Libyan crude is valued by refiners in Europe as an alternative to Brent.

Oil prices were also pushed lower this week by poor global economic data which has stoked fresh fears about the energy demand outlook.

"The predominant drivers (of oil prices) remain ample global supply and a perceived weakening in demand as the world's largest consumers continue to indicate slowing economic growth," said Inenco analyst Dorian Lucas.

"Fears of oil production disruption stemming from the conflicts in the Middle East and North Africa are currently having minimal bullish influence," he added

The Brent oil contract had dived on Wednesday to $95.60 -- the lowest level since early July 2012 -- on worries over abundant oil supplies, poor global economic data and a weaker demand outlook -- before pulling back on data showing a surprisingly heavy drop in US crude inventories.

The Department of Energy said Wednesday that US crude inventories fell 4.3 million barrels in the week ending September 19, confounding analysts' projections of an increase.

A drop in US stockpiles typically indicates stronger demand in the world's biggest economy and top crude consumer, and therefore tends to support prices.

The rising greenback meanwhile makes dollar-priced oil more expensive for buyers using weaker currencies, dampening demand.

The euro plunged Thursday to a near two-year low of $1.2697 on fresh worries over the health of the stuttering eurozone economy and growing expectations of higher US interest rates.

© 2014 AFP

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