Oil markets pushed higher Thursday to pare Wednesday’s losses on a combination of profit-taking and a softer dollar, analysts said.
NYMEX May crude settled $1.05/b higher at $87.73/b, after bouncing between a low of $86.31/b seen in morning US trade and a high of $88.31/b in the afternoon.
ICE June crude settled up $1.44/b at $99.13/b. It had hit a high of $99.47/b at 1:06 p.m. EDT (1706 GMT) before shifting lower.
Both crude complexes proved volatile in US trade on Thursday, with both contracts sliding below Wednesday’s settles before rebounding in the afternoon. Analysts said that a combination of profit-taking and bargain-hunting was contributing to the sharp swings in the price.
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“It’s been a weird day because yesterday we saw such a selloff,” Schneider Electric commodities analyst Matt Smith said.
The front-month Brent contract lost 2.22% of its value on Wednesday.
“There is some bargain hunting coming in, but it’s still really volatile though. It seems as if people are just trying to weigh up if we’re going to move lower,” Smith added.
Additionally, a softer dollar was also helping to add support to the oil complex, other analysts said.
“We’re looking at a weaker dollar and [the market] is responding to that,” Phyllis Nystrom, energy analyst at CHS Hedging, said. “Also, we’re possibly seeing some profit-taking from people who got short over the week. The market hasn’t really given an indication of a turnaround.
At the 2:30 p.m. EDT (1830 GMT) NYMEX market settle, the US Dollar Index was down 0.17% at 82.540, after losing ground against a basket of international currencies overnight, including the euro.
Analysts said that an initially supportive equities environment in Europe helped to fuel a bullish turn in oil markets during overnight trade, but US equities markets failed to hold positive levels, sliding below Wednesday’s settles shortly after the 9:30 a.m. EDT (1330 GMT) market open.
The S&P 500, which opened US trade at 1,552.03, was down 0.65% at 1,541.95 at 2:30 p.m., while the Dow Jones Average was 0.53% lower at 14,539.7.
“The petroleum markets continue to see flurries of bargain hunting on the idea that the recent price decline was overdone, but today’s buying has been offset to some degree by further weakness in the S&P 500,” Citi Futures Perspective energy analyst Tim Evans said in a note.
NYMEX May heating oil settled up 4.45 cents at $2.7791/gal, boosted largely by stronger Brent prices, analysts said. At 2:30 p.m. EDT, ICE May gasoil was up $6.75/mt at $832/mt.
NYMEX May RBOB settled 2.65 cents higher at $2.7555/gal, after pushing sharply higher in the last 15 minutes of US trading. The contract, which traded as low as $2.7025/gal during the session, climbed more than three cents between 2:15 p.m. EDT and the settle on a surge of buying activity.
Macroeconomic indications were light on Thursday, though the US Bureau of Labor Statistics released its weekly jobless claimant count data, which showed an increase of 4,000 initial claims over the week ended April 13, bringing the total count to 352,000. Continuing jobless claims fell by 35,000 over the week to 3.068 million.
Source: platts.com
