Oil prices ended higher to rebound from losses that saw the prices hit a six and a half year low aided by positive economic data from the US despite concerns over increased supply and tepid demand.
West Texas Intermediate, the US benchmark, posted its seventh weekly loss with its prices tempered by concerns over demand in the world’s biggest energy importer, a stronger dollar and concerns over the global oil glut persisting.
Light sweet crude for September delivery added 12 cents or 0.6% to end at $42.50 a barrel on the New York mercantile Exchange. The contract ended the week about 3% lower.
The US’ most active contract however ended below its session highs surrendering some of the gains made in early morning trading on concerns over Greece and China and concerns over the global glut intensifying.
“Though oil has bounced off the low, it remains near this year’s earlier base of about $42 and thus on course to potentially fall to $40 a barrel next,” Fawad Razaqzada, technical analyst at Forex.com, told Market Watch.
“That being said though, the correction potential is now high as ‘bargain hunters’ try to buy ‘cheap’ oil and the sellers take profit ahead of the weekend.”
Brent for September delivery, due for expiry at the end of the session, ended 19 cents lower at $49.03 a barrel but ended slightly higher than 1% higher on the week to snap a run of six straight weekly losses.
Brent for October delivery, the new front month contract, slipped by 44 cents or 0.9 % to end at $49.19 a barrel on the London based ICE Futures Exchange.,
“A weaker Chinese yuan was putting downward pressure on all commodity markets, signaling a change in global macroeconomic conditions,” analysts at Goldman Sachs told Fox Business.
“We believe the net commodity market effects are bearish.”
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