6 October 2014, News Wires – Brent crude recovered some ground to trade near $93 a barrel on Monday after a week of sharp falls, as strong US employment data and a rally in Asian and European stock markets checked a downward trend.
Brent crude oil steadied above $92 a barrel on Monday after a week of sharp falls, as strong US employment data and a rally in Asian and European stock markets checked a downward trend.
Brent saw its steepest weekly decline since April 2013 to fall nearly 5% last week as a strong US dollar, weak demand and ample supply weighed on prices.
At one point on Friday Brent sank to $91.48 in intra-day trading, its lowest price in 27 months.
“It is no surprise to see the price stabilising after the massive sell-offs last week, but we won’t see a hard price floor until OPEC indicates that it will cut production,” Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt, told Reuters.
Brent for November was up 55 cents at $92.86 a barrel by 1100 GMT. US November crude rose 42 cents at $90.16 a barrel.
Asian shares advanced on Monday after upbeat US jobs data eased concerns over slower global growth. Tokyo’s Nikkei jumped 1.3%, while Hong Kong shares rose 0.3%, as pro-democracy activists scaled down protests. European stocks were also stronger.
Oil has fallen in four of the past five weeks due to a global supply glut and the strength of the dollar, which touched a four-year high on Friday against a basket of currencies.
A firmer greenback makes dollar-denominated commodities such as oil more costly for buyers using other currencies.
Strong supply will continue to weigh on prices, said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.
“The main expectation is for a continued, very strong supply growth in the United States,” he said.
Conflict in the Middle East has failed to dent supply, even in Iraq where Islamic State militants have so far failed to impair the country’s southern oil-producing provinces.
“Despite all the geopolitical risks in the market, there is still a surplus of crude. That’s been the case in the last six months,” said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
The Organization of the Petroleum Exporting Countries (OPEC) has not given any indication that it will cut supply at or before its 27 November meeting.
OPEC member Saudi Arabia, the world’s top crude exporter, will maintain steady supplies to at least two Asian buyers in November, industry sources said.
But analysts expect the body to cut production if the oil price approaches $90.