Oil re­bounds to­wards $81

The Hindu Business Line - - COMMODITIES -

Oil re­bounded to­wards $81 a bar­rel on Fri­day as an eq­ui­ties rally lent sup­port, though prices pared gains af­ter a closely watched fore­caster deemed sup­ply ad­e­quate and the out­look for de­mand weak­en­ing.

Crude was still head­ing for its first weekly drop in five weeks, pres­sured by a big rise in US in­ven­to­ries and fading con­cerns for now about loom­ing US sanc­tions aimed at cut­ting Iran's oil ex­ports.

Global eq­ui­ties were set for their big­gest daily gain in nearly a month. De­clin­ing eq­ui­ties amid wider risk-off in­vestor sen­ti­ment had pres­sured oil on Thurs­day.

“A re­bound in eq­uity mar­kets would help Brent to re­bound from $80,” said Petro­ma­trix an­a­lyst Olivier Jakob, adding that a dip be­low $80 on Thurs­day did not clearly break that level as a source of tech­ni­cal sup­port.

In­ter­na­tional bench­mark Brent crude rose 65 cents to $80.91 a bar­rel by 1328 GMT, hav­ing dropped by 3.4 per cent on Thurs­day. US crude added 79 cents to $71.76.

Still, the monthly re­port by the In­ter­na­tional En­ergy Agency (IEA) on Fri­day weighed. The IEA said the mar­ket looked ”ad­e­quately sup­plied for now” and trimmed its fore­casts for world oil de­mand growth this year and next.

“This is due to a weaker eco­nomic out­look, trade con­cerns, higher oil prices and a re­vi­sion to Chi­nese data,” said the IEA, which ad­vises in­dus­tri­alised coun­tries on en­ergy pol­icy.

The IEA re­port is the lat­est gov­ern­ment as­sess­ment to pre­dict weaker de­mand ahead and con­clude that sup­ply is ad­e­quate.

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