Oil rebounded from early lows to stand near $128 a barrel on Monday, as a rally in natural gas and refined oil products helped outweigh demand concerns and a firmer dollar.
At the time to print, US light, sweet crude oil futures rose $1.05 to $128.40 a barrel, off session lows of $125.22. London Brent rose 69 cents to $128.47 a barrel. Traders said the recovery in crude was led by gas, heating oil and gasoline. Investors, especially speculators, with oversold positions were also coming back into the market, they said.
Nymex natural gas futures was nearly 4% higher, while heating oil and gasoline were up nearly 1.5% and 1.3% higher. Oil fell nearly $5 lower last week as investors booked profits after rallying to a record high above $135.
The recovery in crude came despite a firmer dollar, which edged up against the euro on Monday after a survey showed stronger-than-expected US manufacturing activity in May.
The dollar has rebounded against the euro on the prospect of the Federal Reserve eventually lifting rates. The dollar scored back-to-back monthly gains against the euro in April and May for the first time since early 2007.
Oil fell more than $2 earlier in the session as an Iraqi official said the country expected to boost oil exports this month to a new post-war high of about 2.2 million barrels per day (bpd) — about 130,000 barrels a day higher than in May.
Oil prices hit an all-time high of $135.09 a barrel on May 22, boosted by rising flows of cash from investors and concerns supplies will struggle to match demand longer term, but a series of fuel price hikes across Asia and protests in Europe last week has shifted focus to the potential for weakening consumption.
Demand in consuming nations such as the US and the UK has already showed signs of faltering under the weight of rising fuel costs, and some analysts are concerned demand in some Asian countries could be hit as governments cut subsidies.
While the world’s number-two consumer China is resisting raising prices until after the August Olympics, other countries including Taiwan, Indonesia and Sri Lanka have been forced to hike pump rates as governments struggle to fund subsidies. India is expected to raise prices slightly this week and Malaysia may make a similar move.
Oil traders are also bracing for the possibility of more market surveillance by US regulators, under political pressure to stem the rise in prices, a move they fear may shake some speculators out of the market.
Speculators cut their net long positions in crude oil to 25,867 in the week to May 27, down from 50,060 in the previous week, data released by the US Commodity Futures Trading Commission (CFTC) showed last week. The CFTC said last week that it was investigating oil-market trading.
Source: Reuters
At the time to print, US light, sweet crude oil futures rose $1.05 to $128.40 a barrel, off session lows of $125.22. London Brent rose 69 cents to $128.47 a barrel. Traders said the recovery in crude was led by gas, heating oil and gasoline. Investors, especially speculators, with oversold positions were also coming back into the market, they said.
Nymex natural gas futures was nearly 4% higher, while heating oil and gasoline were up nearly 1.5% and 1.3% higher. Oil fell nearly $5 lower last week as investors booked profits after rallying to a record high above $135.
The recovery in crude came despite a firmer dollar, which edged up against the euro on Monday after a survey showed stronger-than-expected US manufacturing activity in May.
The dollar has rebounded against the euro on the prospect of the Federal Reserve eventually lifting rates. The dollar scored back-to-back monthly gains against the euro in April and May for the first time since early 2007.
Oil fell more than $2 earlier in the session as an Iraqi official said the country expected to boost oil exports this month to a new post-war high of about 2.2 million barrels per day (bpd) — about 130,000 barrels a day higher than in May.
Oil prices hit an all-time high of $135.09 a barrel on May 22, boosted by rising flows of cash from investors and concerns supplies will struggle to match demand longer term, but a series of fuel price hikes across Asia and protests in Europe last week has shifted focus to the potential for weakening consumption.
Demand in consuming nations such as the US and the UK has already showed signs of faltering under the weight of rising fuel costs, and some analysts are concerned demand in some Asian countries could be hit as governments cut subsidies.
While the world’s number-two consumer China is resisting raising prices until after the August Olympics, other countries including Taiwan, Indonesia and Sri Lanka have been forced to hike pump rates as governments struggle to fund subsidies. India is expected to raise prices slightly this week and Malaysia may make a similar move.
Oil traders are also bracing for the possibility of more market surveillance by US regulators, under political pressure to stem the rise in prices, a move they fear may shake some speculators out of the market.
Speculators cut their net long positions in crude oil to 25,867 in the week to May 27, down from 50,060 in the previous week, data released by the US Commodity Futures Trading Commission (CFTC) showed last week. The CFTC said last week that it was investigating oil-market trading.
Source: Reuters
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