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Oil trading investors seek bargain crude oil prices
Published on February 5, 2010 by oilprices · No CommentsOil trading investors seek bargain crude oil prices as crude oil rose slightly in Asia trading on Friday following sharp losses overnight with oil prices loosing over five percent yesterday, as investors attracted by cheaper prices returned to the oil market, analysts said.
Sentiment, however, remained weighed down by tumbling stock markets and a stronger US dollar which makes oil more expensive. New York’s main contract, light crude oil futures for March delivery, turned higher in afternoon trade, rising 27 cents to $US73.41 a barrel. The benchmark contract had plunged below $73 in New York trade on Thursday following a surprise rise in US initial weekly jobless claims and a European debt crisis.
Brent crude oil futures for March delivery was up 13 cents to $US72.26 after dropping $US3.79 in London overnight. “After the big selloff on Thursday some investors see this as a potential buy opportunity,” said Victor Shum, a Singapore-based analyst with global energy consultancy Purvin and Gerz.
He said any gains would be limited by the overall gloom generated by falling stock markets and jitters sparked by Greece’s plans to rein in its public deficit, which has pushed the eurozone into its worst-ever crisis.
“Asian stock markets are bleeding and the US dollar has gained strength against the euro and the Japanese yen,” said Shum. Because oil is traded in US dollars, a stronger US currency makes the commodity more expensive to buy for holders of weaker currencies, leading to weaker demand.