Crude Oil Futures Rebound, But Cautiously

Crude oil futures rebounded somewhat Friday following sharp dives the previous day, as news that U.S. quantitative easing may have a finite lifespan begins to be absorbed by global markets. 

At 09.27 GMT, Brent crude for August delivery was up 76 cents, or 0.74%, at $103.09 a barrel. Nymex August crude was up 43 cents, or 0.45%, at $95.84 a barrel. 

"Yesterday was a very violent day," said Olivier Jakob, analyst at Petromatrix in Switzerland. "Everything was being sold, across assets...[and] it's not unusual to have a rebound." 

Cross-commodity and asset class falls Thursday followed the indication by Federal Reserve Chairman Ben Bernanke that the U.S. bond-buying program could be phased out. 

Front month crude futures fell close to $4, or 3.7%, during Thursday's session from a high of $105.62 a barrel to a final close of $102.15, though they dipped below that level at points. 

The lower-growth outlook for China, a big crude consumer, didn't help. 

"The HSBC flash Chinese PMI data for June was below May and continues to signal contraction...[while] the Chinese authorities tightened monetary policy significantly to deflate the credit bubble, with interbank lending drying up and interest rates spiking to 25%," wrote analysts at PVM. 

In contrast, the European purchasing managers indexes were "the best for nine months", said PVM - though they still showed a contraction in Europe's economy. 

Looking beyond the current turbulence, supply and demand factors are moderately supportive of Brent crude oil. 

"Short-term supply risks [including outages in the North Sea], as well ongoing geopolitical tensions and increased refinery throughput in 3Q13, are likely to limit the downside in oil," said VTB Capital. 

In the North sea, the Ekofisk field has been out for scheduled maintenance for most of June, and is due to return to production in the coming days. The Forties field, meanwhile, is due for maintenance Aug. 1-10, according to a trader. 

Geopolitically, the election of a new president in Iran could have an impact on crude markets. Any easing of the tension surrounding Iran's nuclear program, and the sanctions which limit flows of its oil to the market, will be keenly watched by participants. 

At 09.27 GMT, gasoil for July delivery was up 50 cents, or 0.06%, at $876.25. July gasoline was up 221 points, or 0.76%, at $2.8093 a gallon.


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