Oil jumps as sen­ti­ment boosted

The Pak Banker - - MARKETS/SPORTS -

Oil prices ex­tended gains on Mon­day that have lifted crude bench­marks by more than a third from this year's lows, as tight­en­ing sup­ply and an im­prov­ing global out­look strength­ened the sen­ti­ment for a mar­ket re­cov­ery.

Front-month Brent LCOc1 crude fu­tures were trad­ing at $39.37 a bar­rel at 0945 GMT, up 65 cents from their last set­tle­ment. In Jan­uary, prices fell to lev­els not seen since 2003.

U. S. West Texas In­ter­me­di­ate ( WTI) fu­tures fetched $36.57 a bar­rel, up 65 cents from the last close and 40 per­cent above Fe­bru­ary lows.

The May WTI con­tract set­tled on Fri­day at $35.92 a bar­rel, up 3.91 per­cent. While data showed late last week that U.S. en­ergy firms cut oil rigs for an 11th week in a row to the low­est since De­cem­ber 2009, as pro­duc­ers slashed costs, there is still a glut of phys­i­cal oil that some warned could again weigh on prices.

"The past days' oil price rally was from our per­spec­tive less re­lated to a shift in fun­da­men­tals but a re­cov­ery of sen­ti­ment," said Nor­bert Ruecker, head of com­modi­ties re­search with Julius Baer, adding the bounce did not yet her­ald a long-term re­cov­ery.

China im­posed a cap on its en­ergy con­sump­tion by 2020, mark­ing the first time the world's se­cond-big­gest econ­omy has set such a tar­get and cast­ing doubt on its con­sump­tion growth. The Na­tional Peo­ple's Congress, or par­lia­ment, opens its an­nual ses­sion this week.

Traders said shift­ing sen­ti­ment was lift­ing prices as large amounts of short po­si­tions were be­ing closed and bets on ris­ing prices opened.

Ric Spooner, chief mar­ket an­a­lyst at CMC Mar­kets, said: "There's a good prospect that Brent could hit $ 40 ... ( it) could eas­ily do it in the next trad­ing ses­sion."

How­ever, tech­ni­cal an­a­lysts said charts showed the rally could be near its end.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.