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Oil rebounds on bargain hunting

Oil rebounds on bargain hunting
AFP
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First Published: Fri, Sep 23 2011. 09 47 AM IST
Updated: Fri, Sep 23 2011. 09 47 AM IST
Singapore: Oil prices rose in Asian trade on Friday as bargain hunters sought cheaper crude following recent steep falls, analysts said.
New York’s main contract, West Texas Intermediate for November delivery, gained 53 cents at $81.04 a barrel in morning Asian trade, after diving more than five dollars, or 6.3%, in the US session on Thursday.
Brent North Sea crude for November settlement was up 71 cents to $106.20 after plunging $4.87 overnight.
“Oil is rising on bargain hunting and some short covering after it has been dropping for several sessions,” said Ker Chung Yang, a commodities analyst for Phillip Futures in Singapore.
Thursday’s plunge in oil prices rode on the back of a surging dollar as investors flocked to the safe-haven currency on escalating fears about the weak economy and the threat of a new recession.
The US central bank has warned of significant downside risks to the world’s biggest economy, which has yet to fully recover from a recession in 2009, the country’s worst since the Great Depression in the 1930s.
A strong US currency dampens demand and leads to lower prices because it makes dollar-priced crude more expensive for holders of other units.
“Investors may stay on the sidelines,” Ker said, as they wait for leads on the global economy.
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First Published: Fri, Sep 23 2011. 09 47 AM IST
More Topics: Oil | Crude | Markets | Commodity | ICE Brent |