Oil Recovers as Demand Picks Up in Europe and US

Oil prices steadied on Thursday at around $46 per barrel, as demand for gasoline and technical buying after a sharp fall the previous day offset worries about a large global supply glut.

Brent crude futures LCOc1 were $45.83 by 0539 ET, up 2 cents following a 3.4 percent fall on Wednesday.

Gasoline margins in Europe have tripled since mid-October as low prices boosted consumption.

Demand is also strong in the United States, where gasoline importers on the East Coast are losing a trans-Atlantic tug-of-war over European supplies, outbid by Nigerian buyers anxious to avoid a holiday shortage.

“There is strength across the gasoline complex, which is supportive, and there is technical support as we reached the bottom of a two-month range yesterday,” said Olivier Jakob, oil analyst at Petromatrix in Zug, Switzerland.

U.S. crude futures CLc1 were $42.95 a barrel, up 2 cents from Wednesday when prices tumbled 3 percent on high production, rising U.S. stocks and an economic slowdown in Asia.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza