AFP
New York
Oil prices recovered some lost ground yesterday after a sharp fall sparked by worries about China’s faltering economy, the world’s largest energy consumer.
US benchmark West Texas Intermediate (WTI) for October delivery rose $1.07 to $39.31 a barrel on the New York Mercantile Exchange, after finishing below $40 on Monday for the first time in six years.
In London, Brent North Sea crude for October, the international benchmark, finished at $43.21 a barrel, up a modest 52 cents, a day after dropping to its lowest level since March 2009.
“Although we are getting a solid rebound thus far today, there still appears to be a strong tilt towards bearish sentiment from a bigger-picture perspective,” said Matt Smith, head of commodity research at US firm ClipperData.
Smith said the market remained focused on the robust production of the Organisation of the Petroleum Exporting Countries, in particular
Saudi Arabia, and of the US.
Opec’s decision last November to not cut production in the face of declining prices was seen as Saudi Arabia’s bid for market share. And US producers have also refused to cut back in the face of low prices.
“Given the rise in production in the last year from Saudi, and the lack of response by US production... an increasing number of voices are joining the chorus to question whether Saudi’s tactics may have been misguided,” Smith said.
Traders were looking ahead to today’s weekly report on US petroleum inventories from the Department of Energy.
“Most people are looking for a build of 2mn (barrels) in crude oil storage numbers,” said Bob Yawger of Mizuho Securities.
An unexpected increase in crude stockpiles last week contributed in the WTI fall toward $40, he said.
“At least, we’re expecting this number this time, and I’m not sure we’ll get the same kind of effect if we actually get a build, even if there will definitely be pressure on the market.”
Gulf stocks rise after sell-off over oil prices
Stock markets in the Gulf yesterday recovered some of the heavy losses suffered this week due to a panic sell-off sparked by falling oil prices.
Saudi Arabia’s Tadawul All-Shares Index rebounded by 7.38% to close at 7,543.05 points after shedding 5.88% on Monday and 6.86% on Sunday.
Petrochemicals shares led the comeback, surging 8.68% by the end of trading. The sector had shed 7.94% and 7.26% on Sunday and Monday respectively.
Dubai’s DFM Index rose 4.61% to end at 3,558.37 points after shedding 6.96% on Sunday. Market leader Emaar Properties gained 3.43% after losing 8.31% on Sunday.
