Oil Recovers But Still Near 6 Year Lows

Oil bounced back from heavy losses on Tuesday but global oversupply and worries over the severity of the economic slowdown in China, the world’s top commodity consumer, kept prices near 6-1/2-year lows.

European share markets recovered on Tuesday but Chinese stock markets closed down more than 7 percent, with panic selling intensifying after the Shanghai Composite Index .SSEC crashed through key support at 3,000 points.

China cut interest rates on Tuesday in its latest move to stimulate growth, but oil prices barely moved in response.

U.S. crude CLc1, also known at West Texas Intermediate or WTI, was up $1.15 at $39.39 a barrel by 1100 GMT, while Brent LCOc1 was up $1.30 at $43.99.

“In the past few days, we have seen a lot of the effects of the equity markets,” Petromatrix oil analyst Olivier Jakob said.

“Crude is very oversold,” he added.

Oil prices dropped to their lowest since early 2009 on Monday and, despite Tuesday’s slight uplift, many analysts think market fundamentals will keep prices low.

via Reuters

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