Oil prices inch higher as recent drop considered overdone
Crude prices continued tentative rises for a second day on speculation that Wednesday's drop after the Organization of Petroleum Exporting Countries (OPEC) lifted its output limit was overdone.
The rises were mainly due to a technical correction rather than solid news after crude fell more than 5 percent in reaction to OPEC's decision to lift its output limit from 24.845 million barrels per day (bopd) to 30 bopd, in line with the current production level of 30.37 million bopd.
Yesterday's news offered some respite, with a positive Spanish bond auction and better than expected US employment data lifting oil prices as well as the Federal Reserve's Empire State index surging from 0.61 in November to 9.53 this month in the latest sign that the US economic recovery is gaining momentum.
Futures for crude continued to be supported by the latest inventories report from the US government. The figures showed that demand for oil from the world's largest energy consumer was on the rise last week as crude oil stocks shed 1.9 million barrels.
According to a Bloomberg survey today, however, any positive sentiment may be short-lived.
More than half the analysts polled by the newswire this week expect oil prices to fall next week, while 35 percent believe they will rise and the remeinder forecast a flat performance.
The European debt crisis is permanently lingering, and traders remain worried about it hampering growth in the region in the near future.
US light, sweet crude for January delivery, by far the most actively traded contract on the New York Mercantile Exchange (NYMEX), rose 34 cents to reach US$94.21/barrel in morning trade in New York.
February Brent crude rose 0.576 percent to US$104.20/barrel on the ICE Exchange early afternoon.
Today's top risers in the oil and gas sector were:
Sound Oil (LON:SOU), up 11.9 percent at 1.88 pence at midday
Iofina (LON:IOF), up 6.9 percent at 21.25 pence
Fortune Oil (LON:FTO), up 6 percent at 10 pence
Solo Oil (LON:SOLO), up 4.4 percent at 0.06 pence
Dominion Petroleum (LON:DPO), up 4.1 percent at 6.19 pence
The top fallers were:
Cadogan Petroleum (LON:CAD), down 8.7 percent at 30 pence at midday
Indus Gas (LON:INDI), down 7.4 percent at 630 pence
Petro Matad (LON:MATD), down 5.5 percent at 26 pence
New World Oil and Gas (LON:NEW), down 5.1 percent at 9.25 pence
JKX Oil & Gas (LON:JKX), down 4.8 percent at 139 pence
Related news
- London Mining remains on track to hit 2012 production target at Marampa
- Ceres Power Holdings reports significant improvements of its fuel cell products
- Oxford Catalysts Group shares advance as it announces first start-up of FT reactor
- Mariana Resources kicks off drilling programme at Las Calandrias gold-silver project
- Orogen Gold begins Phase 1 drilling programme at Deli Jovan
- Magnolia Petroleum on track to hit 100 wells target by end-2012
- Mwana Africa sells 15pct stake in Freda Rebecca gold mine for $405k - UPDATE
