BS: Oil Rises From Seven-Week Low on Outlook for Improving Demand
By Christian Schmollinger and Ann Koh
Feb. 8 (Bloomberg) -- Crude oil rebounded from a seven-week low as investors purchased futures on speculation demand will improve as the global economy recovers from its worst recession since World War II.
“Everyone is going to be watching every piece of economic data like a hawk looking for signs of self-sustaining economic recovery,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “The geopolitical risk factors were on the backburner through 2009 but in 2010 they are back and the big one is Nigeria.”
Crude oil for March delivery rose as much as 95 cents, or 1.3 percent, to $72.14 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $71.69 at 10:37 a.m. in Singapore.
The contract dropped 2.7 percent to $71.19 a barrel on Feb. 5, the lowest settlement since Dec. 15. Prices plunged 7.8 percent the past three sessions as debt worries in Europe lifted the dollar to an eight-month high against the euro and higher- than-forecast job losses in the U.S. depressed global stock and commodity prices.
Nigeria Attack
“If there’s thought toward tightening budgets and cost- saving, it may move down into the commodity chain,” said Geoff Clear, head of Asia commodities at Australia & New Zealand Banking Group Ltd. in Singapore. “That’s probably what’s driving the mood down at the moment.”
An overnight attack at Obunoma, south of the Nigerian oil hub of Port Harcourt, cut supplies from the Nembe Creek, Soku, Belema and Ekulama fields, the Joint Revolutionary Council said in an e-mailed statement yesterday. Shell hasn’t received any report of the attack, the company’s Nigeria spokesman, Precious Okolobo, said yesterday.
March Brent crude, the pricing benchmark for most African oil grades, rose as much as 85 cents, or 1.2 percent, to $70.44 a barrel on the London-based ICE Futures Europe exchange. It was at $70.10 at 10:38 a.m. Singapore time.
April Contract
The contract, which expires Feb. 11, fell 3.5 percent to $69.59 on Feb. 5, the lowest close since Oct. 7. The more widely held April contract rose 0.7 percent to $70.55 a barrel.
New York oil futures have fallen 15 percent from a 15-month high of $83.95 on Jan. 11, as the dollar rose and investors fret that tighter lending controls in China, the world’s second- largest energy user, would slow demand growth.
Prices jumped 2.1 percent on Feb. 1 when the Institute for Supply Management’s U.S. factory index showed its biggest gain in five years in January.
Hedge-fund managers and other large speculators reduced their bets on rising oil prices for a third week, according to U.S. Commodity Futures Trading Commission data.
Speculative net-long positions, the difference between orders to buy and sell the commodity, fell 14 percent to 86,027 contracts on the New York exchange in the week ended Feb. 2, the Washington-based commission said in its weekly report.
--With assistance from Gavin Evans in Wellington and Dulue Mbachu in Lagos. Editors: John Viljoen, Jane Lee.
To contact the reporters on this story: Christian Schmollinger in Singapore at +65-6212-1898 or christian.s@bloomberg.net; Ann Koh in Singapore at +65-6212-1509 or akoh15@bloomberg.net
To contact the editor responsible for this story: Clyde Russell at +65-6311-2423 or crussell7@bloomberg.net
