MW : OIL FUTURES: Crude Claws Back Some Losses On Short Covering
Crude futures clawed back some losses Friday after traders bought to cover shorts and take advantage of lower prices.
Analysts expect prices to stay above $65 barring any bad news about the global economy and a further strengthening of the U.S. dollar.
If oil trades between $60 and $65, "OPEC would be unhappy with prices that low," Ben Westmore, commodities economist at the National Australia Bank, said.
At 0650 GMT, light, sweet crude futures for delivery in November traded at $66.19 a barrel on the New York Mercantile Exchange, up 30 cents in the Globex electronic session, after falling to a nine-week low overnight.
November Brent crude on London's ICE Futures exchange rose 42 cents to $65.24 a barrel.
Buyers are likely to buy if prices weaken to $65, thus providing support, said Clarence Chu, a trader at Hudson Capital.
Traders will also be assessing the impact of the Group of 20 meeting and durable goods data on the currency and equity markets later today.
Moderation in the U.S. equity market could indicate that "investors are uncomfortable about the outcome of the G-20 meeting," Westmore said.
Weak fundamentals continue to exert a bearish influence on oil markets.
Nymex crude broke through support levels, triggering long liquidation, Jim Ritterbusch, president of trading adviser Ritterbusch & Associates, wrote in a note.
"Odds would appear to favor a much quicker test of the $65 level in nearby crude than we had previously expected," he said.
Mike Sander of Seattle-based investment advisory firm Sander Capital Advisors wrote in a note that the 2.7% drop in August U.S. existing home sales was "a reality check, letting us know the economy is not always going to show positive news."
At 0651 GMT, oil product futures were mixed.
Nymex reformulated gasoline blendstock for October - the benchmark gasoline contract - were 34 points higher at 164.00 cents a gallon, while October heating oil traded at 169.78 cents, 164 points higher.
ICE gasoil for October changed hands at $538 a metric ton, down $1.25 from Thursday's settlement.
