Oil Bounces After Oversold Conditions and Libya Attacks

Oil futures jumped on Thursday, rebounding on the back of what analysts referred to as “oversold” conditions, as reports of attacks on Libyan oil terminals reminded the market of the risks to supplies in the Middle East.

Oil futures jumped on Thursday, rebounding on the back of what analysts referred to as “oversold” conditions, as reports of attacks on Libyan oil terminals reminded the market of the risks to supplies in the Middle East.

Advances for oil came despite a hefty increase in weekly U.S. crude inventories. The natural-gas market, meanwhile, mulled their own supply data, which revealed a smaller-than-expected weekly decline.

March West Texas Intermediate crude picked up $1.60, or 5.7%, to $29.95 a barrel on the New York Mercantile Exchange, briefly touching a high of $30.14. Moves for WTI have come in fits and starts Thursday. It was trading around $28.57 before the supply data and fell initially after the data before surging higher after the Libya news.

March-dated Brent crude , the global oil benchmark, jumped $1.62, or 5.9%, to $29.52 a barrel on London’s ICE Futures exchange.

Both benchmarks had fallen to their lowest levels since 2003 on Wednesday.

Two issues are providing support for oil Thursday, said Phil Flynn, senior market analyst at Price Futures Group.

via MarketWatch

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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