Oil bounced back to $57 a barrel today, recouping some of the previous session's near 4 per cent loss, buoyed by short-covering despite a still uncertain outlook for the global economy.
US crude for June delivery rose 59 cents to $56.93 a barrel by 8.02am, after climbing to $57.10. The contract fell $2.28 to settle at $56.34 a barrel on Friday, down from a six-month high of more than $60 hit earlier last week.
London Brent crude rose 60 cents to $56.58.
"Prices are up on short-covering and traders are buying in after the sharp sell-off on Friday," said Tetsu Emori, a commodity fund manager at Astmax Co.
Analysts said investors would be eyeing data on US homebuilder sentiment and sales later on Monday to gauge how the world's largest economy is faring.
Confidence at Japan's manufacturers edged up from record lows, a Reuters monthly poll showed, as rebounds in exports and production suggest the world's second largest economy may have reached a trough in the first quarter.
Asian shares fell today as concerns about slumping corporate profits and the still-uncertain outlook for the global economy fuelled a retreat from recent highs.
Oil fell nearly 4 per cent toward $56 a barrel on Friday as dealers became increasingly pessimistic about the outlook for global energy demand after three top energy forecasters - the International Energy Agency (IEA), the Energy Information Administration (EIA), and OPEC - recently downgraded their forecasts for global energy demand in 2009.
Losses on equities markets and moderate gains in the US dollar against other currencies also encouraged selling in the commodities markets.
OPEC, which has agreed to cut 4.2 million barrels per day (bpd) of output since September, will meet on May 28th to revisit production policy.
Reuters