Crude futures bounced back from two-month lows on Tuesday, helped by a weaker dollar, but an oil stocks overhang and a drop in bullish bets by investors weighed on prices.
Brent crude was at $47.36 per barrel at 1022 GMT, up $1.11 or 2.3 percent. U.S. West Texas Intermediate crude was up 87 cents at $45.63 a barrel.
Saudi Energy Minister Khalid al-Falih said on Tuesday the oil industry needed a price above $50 per barrel to sustain investments but added that downward pressure would prevail because of an inventory glut.
“We need a price higher than $50 to achieve balance in oil markets in the long term,” Falih told German business daily Handelsblatt.
“But there are still excess stocks on the market – hundreds of millions of barrels of surplus oil. It will take a long time to reduce this inventory overhang,” he added.
Oil prices fell to a two-month low on Monday on renewed fears of oversupply.
On Tuesday, commodity and stock prices rose as the dollar index dropped 0.4 percent. The UK pound bounced back from a 31-year low amid easing political tensions in Britain and as hopes for stimulus measures boosted risk appetite.
A brief suspension of tanker loading in Iraq and conflicting reports of new attacks in Nigeria also bolstered prices.
On the downside, a Reuters poll showed that China’s economic growth likely cooled to a seven-year low in the second quarter as the industrial sector lost steam and a boost from financial services faded.
via Reuters
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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