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Oil prices bounce back on supply concerns
AFP
NEW YORK
Petroleumworld.com 06 12 07World oil prices swung higher Monday amid supply concerns after a heavy selloff Friday triggered in part by fears that rising interest rates would crimp demand.
New York's main oil futures contract, light sweet crude for delivery in July, jumped
1.21 dollars to close at 65.97 dollars per barrel.
In London, Brent North Sea crude for July delivery firmed 96 cents to settle at 69.56 dollars per barrel.
"Energy markets sold off hard last Friday as the rise in global interest rates and sharp decline in equity markets ignited fears of weakening energy demand," said Mike Fitzpatrick of Man Financial.
The selloff was "likely overdone," he said, adding that crude oil prices bounced back on news Saudi Arabia was going to continue to cut back supplies through July and on comment by Iran's oil minister that there was no global crude oil shortage.
For Victor Shum, an analyst with energy consultancy Purvin and Gertz, concerns about supplies of US motor fuel over the northern hemisphere summer was a major factor underpinning prices.
"The gasoline market will continue to be tight in the summer and traders will continue to watch gasoline demand and US refinery production," Shum said.
US gasoline, or petrol, supplies remain in focus amid the American summer holiday driving season when demand usually peaks.
Traders also focused on Nigeria, Africa's biggest producer of crude. A Nigerian armed group fighting for control of oil resources in the Niger Delta region said Monday it would release all foreign hostages.
Nigeria has seen an upsurge in violence and hostage-takings by militant groups in the past year. Some 190 foreigners, mostly employed in the oil sector, have been abducted and held captive for days and sometimes weeks.
The violence has disrupted Nigeria's energy exports for months, lending further support to crude prices.
AFP 11 2011 GMT 06 07
Copyright© 2007 AFP. All Rights Reserved.
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