Oil markets catch breath after biggest gains in six years

By Meeyoung Cho
SEOUL, Aug 28 (Reuters) - Crude oil futures were largely
steady on Friday after posting their biggest one-day rally in
over six years the day before led by recovering equity markets
and news of diminished crude supplies.
Stock markets around the world rallied on Thursday, shaking
off a slump related to China growth fears, as strong U.S.
economic data boosted investor sentiment, and the dollar
advanced for a third consecutive session. MKTS/GLOB
Front-month October Brent crude LCOc1 had dipped 20 cents
to $47.36 per barrel as of 0046 GMT. It settled $4.42 higher at
$47.56 per barrel in the previous session.
U.S. crude CLc1 edged down 3 cents to $42.53 per barrel,
after ending up $3.96, or 10.3 percent, at $42.56 per barrel,
its biggest one-day percentage gain since March 2009.
"A short covering rally, led by crude oil pushed commodities
higher across the board. Better than expected U.S. GDP numbers
was the main spark, although the force majeure on BP's exports
from Nigeria extended the gains," ANZ said in a note on Friday
morning.
"The recovery in commodity prices looks fragile with
concerns over China's growth still weighing on market activity,"
the bank added.
The U.S. economy grew faster than initially thought in the
second quarter on solid domestic demand. Gross domestic product
expanded at a 3.7 percent annual pace instead of the 2.3 percent
rate reported last month, the Commerce Department said on
Thursday in its second GDP estimate for the April-June period.
ID:nL1N1120QD
Shell's Nigerian unit, Shell (LONDON:RDSa) Petroleum Development Company
(SPDC), declared force majeure on Bonny Light crude oil exports
on Thursday after shutting down two key pipelines in the country
due to a leak and theft. ID:nL1N1121LL
China's falling auto sales have been at the forefront of
concerns that its economy is slowing much faster than expected,
weighing on oil prices. ID:nL5N11204A
Venezuela has been contacting other members of the
Organization of the Petroleum Exporting Countries (OPEC),
pushing for an emergency meeting with Russia to come up with a
plan to stop the global oil price rout, the Wall Street Journal
reported. ID:nL4N1125I3