Oil firmed to just over $70 (€55) a barrel yesterday as bargain hunting investors snapped up barrels after rising US petrol supplies triggered a two-day rout.
US light crude for June delivery settled 25 cents higher at $70.19 a barrel, halting a slide that has cut prices by more than 6 per cent since Wednesday.
London Brent crude gained 66 cents to $70.95 a barrel.
Prices are more than $5 below record highs touched two weeks ago, but still up nearly 15 per cent since the start of the year.
Investors have scrambled for oil exposure on hopes that strong demand, years of underinvestment and mounting political risks will keep the market's three-year rally running strong.
Some analysts said the fall this week - prompted by an unexpected rise in US petrol inventories - may be just a brief bump on the road to new highs.
"We believe that the positive price bias remains in place to possibly make a move to the upper $70s or low $80s per barrel in the next couple of months," said First Energy Capital analyst Martin King in a research note.
On Wednesday,US inventory data showed the first increase in petrol stocks for two months. The data also showed little change in petrol demand, indications that US citizens may be adjusting their driving habits to ease the pain of soaring fuel costs.
Petrol prices led the market's fall, dropping 8 per cent in two days, before rising 4.60 cents to close at $2.0406 a gallon on Friday. The market also remains on edge over the risk of disruption from fourth-largest oil exporter Iran, locked in an intensifying row with the West over its nuclear ambitions.
At the United Nations, western powers plus China and Russia held a first round of talks on a draft resolution that demands Tehran suspend nuclear activities. The sponsors have warned they will push for sanctions if Tehran persists.
- (Reuters)
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