February 2010
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Page added on February 5, 2010

Oil prices up on short covering, US job Data next cue

Crude oil prices rebounded on the back of short covering Friday in Asia after prices dipped below $73 a barrel in midday trading session. Global market sentiment turned negative overnight, reflecting the euro’ s weakness versus the dollar due to debt problems in the euro zone, which helped pummel crude prices by 5% in floor trade Thursday, analysts said.

On the NYMEX, US Light crude oil futures for delivery in March traded at $73.33 a barrel at 0602 GMT, up $0.19 in the Globex electronic session, while in London, Brent crude oil futures on London’s ICE Futures exchange rose $0.06 to $72.19 a barrel.

Crude rose on short covering in early Asian trading, but was quickly brought back below the psychological level due to cut-loss selling. Short covering emerged again later in the Asian day, boosting prices above $73 again. US job data due later Friday will help determine crude’s next move, analysts said.

The “important employment report could still proffer some bullish surprises,” Jim Ritterbusch of trading advisory firm Ritterbusch and Associates in Galena, Ill. said in a subscriber note. If crude oil prices fall, support around $70 “could easily set the stage for another up-spike next week unless the dollar continues to strengthen amidst a further markets plunge.”