petroleumworld

Oil prices recovered slightly Monday after a massive selloff last week that was triggered by weak US jobs data and debt woes in the eurozone.

New York's main futures contract, light sweet crude for delivery in March, climbed 70 cents to 71.89 dollars a barrel after shedding six dollars last week.

London's Brent North Sea crude for March gained 52 cents to 70.11 dollars a barrel.

The market remains pessimistic about the global economic recovery amid concerns about sovereign debt woes in the eurozone and disappointing official data Friday that showed the US economy lost 20,000 jobs in January.

"There is very little of substance emanating from policymakers to lend a sense of optimism to market participants," said Mike Fitzpatrick of MF Global.

"Under such circumstances, pessimism about the pace and sustainability of recovery must necessarily increase," he said, noting that a recent meeting of finance ministers of the Group of Seven industrialized nations had not led to any concrete actions to spur recovery.

Eurozone finance chiefs had sought to reassure their G7 counterparts on Greece's deepening debt troubles during the weekend meeting in Canada, but traders looking for any signal of a rescue plan were disappointed, analysts said.

But the reassurances helped provide a little lift to the embattled euro against the dollar Monday, which helped support oil prices on Monday.

The euro had plunged to its lowest level against the dollar since late May on Friday amid anxiety over the state of public finance in the eurozone and disappointing US employment figures as investors sought the safe-haven US dollar.

A stronger US unit makes dollar-priced crude oil more expensive for buyers using weaker currencies -- which in turn tends to dent demand and in turn prices.

Oil prices also won a slight reprieve amid unusually cold weather in the United States.

The mid-Atlantic region braced for a new winter storm this week after digging out from a weekend blizzard.

"So far, oil market fundamentals have been on a gradually improving trendline, and the recent bout of cold weather is likely to speed up that process of correction further," analysts at Barclays Capital said in a clients' note.

"In fact, the advent of the powerful storm across the US mid-Atlantic over the weekend has provided some support to prices," they said.

Story from AFP
AFP 02/08/2010 21:11

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