Brent Bounces from 2-year Low; U.S. Crude Rallies
NEW YORK, Sept 11 (Reuters) - Brent crude rose and broke a string of five straight lower finishes on Thursday, climbing back from a two-year low hit after increasing supply and signs of weakening demand countered worries that conflicts in the Middle East could curb output.
Oil prices fell in tandem early in the day, but U.S. futures broke higher during morning trade in New York after triggering technical support levels. Its sharp rebound from a 16-month low lowered Brent's premium over U.S. crude <CL-LCO1=R> to less than $5 a barrel intraday, its smallest since July.
"Spread positions appeared to be liquidated in force ahead of Monday's October Brent expiry," said Jim Ritterbusch, president at Ritterbusch and Associates in Galena, Illinois.
Some traders linked the bounce in U.S. crude to news that Russia said air strikes against Islamist militants in Syria without a U.N. Security Council mandate would be an act of aggression.
"Russia's comments may slow the president's plan on getting rid of (Islamic State militants) and could keep Iraq's production slowed or in danger," said Phil Flynn, analyst at Price Futures Group in Chicago.
Others said the bounce was a sign that markets may be oversold after Brent slid more than 5 percent in six days.
"I think it is just a rally in an oversold market," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
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