On Friday, Brent crude oil stood above $98 per barrel as the market bounced back from its two-year low but the prices continue to struggle amid pressure from the strong dollar, abundant supplies and weak demand.
On Thursday, Brent futures hit a two-year low at $96.72.
According to Reuters, October delivery ICE Brent futures rose 28 cents to stand at $98.36 per barrel, however, the international oil benchmark could be heading for the largest weekly loss since August 1.
Expiring Monday, the October contract is adding to selling pressure with traders and investors rolling positions toward November.
US crude rose 43 cents at $93.26 per barrel after closing $1.16 up in the previous trading session.
Analysts report that the market has support after Thursday’s multi-year low, with investors saying oil is oversold.
Saxo Bank senior commodity strategist, Ole Hansen said, “There was a big bounce in WTI (US) crude yesterday, which is a reflection of the fact that we’ve seen such a big selloff recently that the market was getting a bit over-extended.”
He added, “Have we seen the lows for now? It’s too early to say. The shorts are now being covered but any uptick in the market will probably be met with renewed weakness unless the geopolitical issues flare up.”
Market Watch reported that the stronger dollar has kept pressure on the prices of oil and other commodities. The dollar can have a negative effect as it makes the commodities more expensive for users in different currencies.
On Thursday, the Internal Energy Agency cut the forecasts for growth in global oil demand to 900,000 barrels per day after OPEC made a similar move early this week. Abdalla Salem el-Badri, OPEC secretary general said that there exist no plans for holding an emergency meeting as he expects the prices of oil to rebound by the close of 2014.
Salem said, “I am not really worried. July and August aren’t really good months to judge the market because of refinery maintenance and other issues.”
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