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Oil rebounds from 2-month lows, outlook seen volatile

Published 2016-07-07, 08:44 p/m
© Reuters. Oil rebounds from 2-month lows, outlook seen volatile
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By Henning Gloystein
SINGAPORE, July 8 (Reuters) - Oil prices rebounded in early
trading on Friday, bouncing off two-month lows hit in the
previous session when prices fell 5 percent on news that the
U.S. weekly crude draw missed some forecasts.
Traders said that the outlook looked volatile as a refined
product glut and slowing economic growth weighed on markets
while the risk of supply disruptions could tighten supplies.
International Brent crude oil futures LCOc1 were trading
at $46.95 per barrel at 0027 GMT on Friday, up 55 cents, or 1.19
percent, from their last settlement. U.S. West Texas
Intermediate (WTI) crude was up 43 cents, or 0.95 percent, at
$45.57 a barrel.
The bounce came after a 5 percent fall in prices the
previous sessions, to two month lows, after the U.S. government
reported a weekly draw in crude oil inventories that was lower
than many analysts had expected.
"The oil price fell to its lowest level in almost two months
after an EIA report showed that inventories fell by less than
expected. The EIA report said crude supplies fell 2.22 million
barrels (524.35 million barrels) to in the week ended July 1,"
ANZ bank said on Friday.
Traders said that the price fall in the light of an
inventory reduction had been an overreaction.
"Crude stocks have now fallen for almost two months
straight, that doesn't warrant the price falls we saw yesterday,
so this morning there was a correction," one oil trader said.
Beyond the short-term, traders said that the outlook would
likely be choppy as the threat of supply reductions could
tighten markets while an ongoing glut in refined products,
especially in Asia and North America, as well as slowing
economic growth weighed on oil. by Ed Davies)

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