Brent Crude Oil Rises Above $100 Per Barrel
Oil futures rose above $100 a barrel on Monday, extending the two previous sessions' gains as prices drew buyers back into the market following sharp drops earlier in the month.
Brent has lost nearly 8.5 percent since the start of April on concerns about demand as growth slowed in the United States and China, the world's two largest oil consumers, while recession in Europe deepened.
Brent crude futures was up 72 cents to $100.37 a barrel. U.S. light, sweet crude for June delivery was up 50 cents to $88.77 a barrel after hitting a high of $89.45.
"There is a little bit more confidence in the market. We're seeing a rebound after poor news as people begin to think the economic outlook is not as bad as they feared," said Simon Wardell, an analyst at Global Insight.
"This is more bargain-hunting than anything else. People are getting back in the market, but that may not be sustained depending on the (economic) data" this week, he added.
Gold, which has also taken a tumble in recent weeks, was up more than 2 percent on Monday, supported by strong physical buying.
Investors will scour U.S. and Chinese data this week for growth cues. The HSBC Purchasing Managers' Index for China for April will be released on Tuesday, while the United States will announce first-quarter GDP growth on Friday.
Economists polled by Reuters expect the U.S. economy to have expanded by 3.0 percent, up from 0.4 percent in the last three months of 2012.
A pair of unexpectedly soft regional Federal Reserve economic surveys last week, however, reinforced the view that the fourth spring slowdown in as many years is unfolding in the United States.
Plenty for the Bears
"Are we in the midst of a fundamental reappraisal of oil's price potential or merely witnessing a temporary loss of confidence? There is a real chance on this occasion that it is the former," David Hufton of PVM oil brokerage said, citing a tepid global growth forecast, reduced political concerns and high stocks.
"Plenty to be bearish about, therefore, in the absence of a supply interruption, until the price falls to a level which will discourage new oil supply," he said.
Hedge funds and other large speculators cut their net long U.S. crude futures and options positions in the week to April 16, the U.S. Commodity Futures Trading Commission (CFTC) said.
Brent's fall below $100 prompted comments from oil hawks Iran and Venezuela on Thursday that OPEC could call for an emergency meeting ahead of one scheduled on May 31, although there is no indication of such a meeting yet.
As worries over a sluggish world recovery persisted, finance leaders of G20 economies edged away from a long-running drive toward government austerity in rich nations, rejecting the idea of setting hard targets to cut national debt.
Iran's Mehr news agency reported that Iran and officials from the U.N. nuclear watchdog will hold a new round of talks over Iran's disputed nuclear programme on May 21 in Vienna.
PVM's Hufton nevertheless played down the impact of tensions over the Iranian nuclear programme on oil markets.
"The Iranian nuclear standoff is a concern but it is constantly being pushed back, and the West does not have the appetite for a confrontation," he said.