Oil Recovers After Big Selloff

Oil rose on Tuesday after one of its biggest selloffs this year but looked vulnerable to more falls after China’s stock market took another tumble and Greece moved closer to leaving the euro zone.

Investors kept a close eye on talks in Vienna over Tehran’s nuclear program that could lead to increased exports of Iranian crude at a time of global oversupply.

Brent crude for August LCOc1 was up 90 cents at $57.44 a barrel by 1020 GMT (6:20 a.m. EDT), following a more than 6 percent drop in the previous session. On Monday, Brent briefly touched $56.38, its lowest since April 10.

U.S. crude CLc1 traded at $53.10, up 57 cents from the close on Monday, when it reached levels last seen in mid-April.

Despite the rally, most analysts were bearish.

“After yesterday’s sharp and fierce selloff it is impossible to paint an even remotely bullish technical picture,” said Tamas Varga, analyst at brokerage PVM Oil Associates.

“The downtrend should resume shortly.”

Influential U.S. investment bank Goldman Sachs said the fall in oil prices was a consequence of oil market oversupply.

via Reuters

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