LONDON, Oct 4: World oil prices bounced back above $80 per barrel in New York on Thursday, reversing earlier losses caused by worries over economic growth and crude demand in the United States, dealers said.
New York’s main futures contract, light sweet crude for delivery in November, won back 35 cents to $80.29 per barrel.
In London, the price of Brent North Sea crude for November delivery regained 56 cents to $77.75 per barrel.Last Friday, Brent oil hit a record high $81.05 per barrel, while New York crude struck an all-time peak of $84.10 last month.
“The market is focusing on a number of things,” said David Moore, a commodity strategist with the Commonwealth Bank of Australia.
“It is attempting to assess how strong the US economy will be and how it will impact oil demand.”
Looking ahead, the market will keep a very close watch on Friday’s US non-farm payrolls data for September for clues about the strength of the US economy, traders said.
Crude futures had dipped earlier on Thursday on expectations that slower US economic growth could dent demand for crude and after official data showed an unexpected rise in US inventories.
Traders focus on reserves in the United States because the country is the world’s biggest energy consumer, ahead of number two China.
The US Department of Energy’s (DoE) weekly report released on Wednesday showed stockpiles of distillates, including heating fuel, unexpectedly dropped by 1.2 million barrels to 135.9 million barrels during the week ended September 28.
Industry analysts had forecast a rise of 1.3 million barrels.
But crude oil rose by 1.2 million barrels last week, the DoE report showed.
Most analysts had expected oil reserves to fall.
Sucden analyst Michael Davies said traders had initially reacted to the US energy report as an opportunity to cash in recent gains.
Prices fell earlier Thursday because the market was “still suffering from an unexpected build in US crude supplies,” Davies added.
“It seems that a 1.2 million barrels build in crude stocks during last week has outweighed a 1.2 million barrels decline in distillate stocks, with investors paying more attention to crude inventories.—AFP