Oil rises back toward $55, outlook still fragile

Friday, 6 February 2015 00:00 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): Oil rose toward $55 a barrel on Thursday, recovering from part of the previous session’s slide after China took steps to pour liquidity into the world’s second-biggest economy, although traders and analysts said oil’s outlook looked weak.

Crude snapped a four-day winning streak on Wednesday, when the US government said crude inventories increased by 6.3 million barrels, rising for a fourth consecutive week to hit a record high. The market gained support on Thursday from optimism that steps by China’s central bank to pour in fresh liquidity would spur demand for energy in the second-largest oil consumer after the United States. Brent crude rose 83 cents to $54.99 a barrel by 1016 GMT (05:16 a.m. EST), having fallen more than a dollar intra-day earlier and settling 5.5% lower on Wednesday. US crude added 60 cents to $49.05. “It will be some time yet before we see any sustained trend reversal in oil prices,” said Carsten Fritsch, analyst at Commerzbank. “There’s no basis for a sustained recovery at the moment.” The market remains highly volatile. Oil began to rise last week from near-six-year lows, in part due to a downturn in US rig activity that could eventually dampen rapid growth in shale oil production, only to tumble on Wednesday. Other participants said it was too soon to expect a sustained price rise.“I think prices will consolidate around these sorts of levels before moving lower,” said Christopher Bellew, a senior broker at Jefferies Bache. “It takes a lot of time for fewer rigs to translate into lower oil production.” A workers’ strike in the United States at nine plants, including seven refineries accounting for 10% of the country’s refining capacity, added to concerns over crude demand. The United Steelworkers union (USW) said a new contract offer was made by lead oil company negotiator Royal Dutch Shell Plc on Wednesday, and that it will respond after considering the offer on Thursday.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.