Oil Rebounds From 12-Year Low
12 February 2016 - 04:10PM
Dow Jones News
Oil-futures prices on the New York Mercantile Exchange rebounded
Friday on short-covering after touching a more than 12-year low the
previous day.
Light, sweet crude futures on Nymex for delivery in March traded
at $27.48 a barrel at 0243 GMT, up $1.27 in the Globex electronic
session. April Brent crude on London's ICE Futures exchange rose
$1.29 a barrel to $31.25.
Prices touched a low of $26.05 a barrel a day ago, the lowest
settlement since May 6, 2003, as the market largely ignored a drop
in weekly U.S. crude-oil inventories. A supply glut has dragged
prices down over the past two years.
The plunge in prices got some respite when traders moved in to
cover their short positions. Late Thursday, The Wall Street Journal
reported that the United Arab Emirates energy minister said current
prices have forced non-Organization of the Petroleum Exporting
Countries producers to at least cap output increases.
Market sentiment firmed up after the U.A.E. energy minister said
OPEC was ready to cooperate on production cuts, though few believe
such an outcome would materialize.
"We view this as further jawboning, with the likelihood of a
coordinated response on supply cuts very low," according to an ANZ
Bank report.
The International Energy Agency and the U.S. Energy Information
Administration said this week they expect the oversupply to persist
for months, keeping prices low.
"We do believe that Brent and [West Texas Intermediate] prices
will rebound in the second half of 2016 as more aggressive cutbacks
in production are forthcoming, particularly in the U.S.," said John
Davies, head of commodities research at BMI Research.
Write to Biman Mukherji at biman.mukherji@wsj.com
(END) Dow Jones Newswires
February 11, 2016 23:55 ET (04:55 GMT)
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