• Saturday, May 18, 2024
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BusinessDay

Oil rises, reversing early losses

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Crude oil prices rose on Monday, reversing early losses to trade higher by late morning in New York as the dollar weakened, but ample supplies of crude oil were expected to limit gains. Reuters report showed that Brent crude for July was up 41 cents per barrel at $105.05, at 11:20 a.m. EDT (1504 GMT). U.S. crude futures were up 82 cents per barrel at $96.84.

“The dollar’s move has been pretty strong lately, maybe you’re seeing a little more profit taking,” said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.

The U.S. dollar fell against a basket of six currencies , making crude oil and other dollar-denominated commodities cheaper for holders of foreign currencies.

“It looks like the bulls are trying to start the rally up again. I would think the market meets greater resistance because we have weak underlying fundamentals,” McGillian said.

The closer the market pushes to the 2013 U.S. crude oil high of $98 per barrel, the more resistance it faces, he added. The International Energy Agency expects weaker demand growth for oil in 2013, along with higher supply.

Meanwhile, Gold fell for an eighth session to its weakest in more than a month as fears the U.S. Federal Reserve may wind back its economic stimulus programme hurt its appeal as a hedge against inflation. Bullion is down 20 percent so far this year.

Short-term “the market looks fairly balanced, with Brent trading in a range between $90 and $110 per barrel. It is difficult to see it breaking out of that for a while,” said Olivier Jakob, analysts at Swiss energy consultancy Petromatrix.