Oil bounces above $130 after steep 3-day slump
Singapore, July 18, 2008
Oil prices bounced above $130 a barrel on Friday as buyers came back into the market after a more than 10 percent slide in three days.
Easing tensions between Iran and the West and worries that high prices and a weaker US economy will undermine demand have combined to send oil down $15 in just three days, on track for their biggest weekly fall since the contract started trading in New York in 1983.
US light crude rose $1.43 to $130.72 a barrel by 0652 GMT, still far from the record high of $147.27 on July 11, with Wednesday's report showing an unexpected build in US crude oil stocks still weighing heavily.
London Brent crude gained $1.38 to $132.45 a barrel. 'The pullback is perceived as an opportunity to buy,' said Gerard Burg of Australia National Bank in Melbourne.
There has been some bullish news helping oil's recovery, after mostly bearish headlines this week.
In Brazil, oil workers said they would expand a strike - which was limited to the Campos Basin - to all production and refining units of state-run Petrobras. So far the strike has
had no affect on output.
Nigerian community members on Thursday blew up a crude oil
pipeline operated by Italian energy group Eni in the Niger Delta. ENI said it had shut 47,000 barrels per day of output from the world's eighth largest exporter.
But this was offset by news from Chevron, which said on Thursday it had lifted a force majeure on Escravos crude
following repair work to a pipeline damaged by sabotage in June in Nigeria.
And Iran's foreign minister made positive noises about talks aimed at easing tensions over the country's nuclear programme, saying on Thursday US participation was 'positive.'
The US said on Wednesday it was sending an envoy to Geneva to join nuclear talks with Iran for the first time, to underline to the Islamic Republic and others that Washington wanted a diplomatic solution to the impasse.
Oil markets fear any military action against Iran could lead to the closing of the Straits of Hormuz, through which around 40 percent of the world's traded oil moves.-Reuters