Tokyo: Oil rose above $49 a barrel on Thursday, after falling 2.6% the previous day, as further supply cuts by Opec and gains in stock markets superceded worries about the global economy.
Opec oil supply fell in March for a seventh consecutive month, but remained above its target as some members of the group pumped more than agreed levels, a Reuters survey showed.
Asian stocks outside Japan and Tokyo’s Nikkei both rose more than 3% on Thursday after US homes sales and manufacturing data gave glimmers of hope that the deep recession was moderating.
Oil’s losses on Wednesday were sparked by US government data showing crude stocks had risen more than expected to a 16-year high. Gasoline and distillate supplies also unexpectedly rose.
Crude for May delivery rose 63 cents to $49.02 a barrel by 0320 GMT, after settling down $1.27 a day earlier.
London Brent crude was up 76 cents at $49.20 a barrel.
Oil has fallen nearly $100 from a record high above $147 in July 2008 as the economic downturn dents global energy demand.
“We are swinging back and forth. The real economy is still too weak. US gasoline demand is not doing very well,” said Tony Nunan, risk manager at Mitsubishi Corp in Tokyo. “So that will keep the market from rising too far, but I think the Opec’s cuts will keep the market from falling too far.”
Investors remain sensitive to the raft of economic developments due later in the day, which include an expected rate cut by the European Central Bank and US non-farm payrolls data, both of which are likely to put downward pressure on oil prices, he said.
Forecasters polled by Reuters expect nonfarm payrolls to register a decline of 650,000 for March, similar to the 651,000 shed in February.
Adding a bullish note to sentiment was a draft G-20 communique containing a pledge by world leaders to regulate major hedge funds for the first time and set up a new oversight board to monitor the global financial system.
Traders said oil prices could also be affected by news that North Korea had begun fuelling a long-range rocket and could launch it by the weekend, CNN said, with the United States and others promising punishment for a move they say violates UN resolutions.