Forexpros – Crude oil futures regained strength on Thursday, as the previous day’s rout that took prices to a five-week low created bargain buying opportunities for investors.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD95.69 a barrel during European morning trade, gaining 0.78%.
It earlier rose by as much as1.05% to trade at a daily high of USD95.93 a barrel.
Crude prices plunged nearly 5% on Wednesday, as lingering concerns over a possible mass downgrade in the euro zone prompted investors to shun riskier assets.
Euro zone developments have been dominated trading in the oil market for the last several months, amid worries that the sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
The euro zone accounted for nearly 16% of global oil consumption in 2010, according to data from British Petroleum.
However, the sharp decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid ongoing concerns over the threat of a disruption to Iranian supplies.
Tensions over Iran’s nuclear program have been building in recent sessions, helping buoy oil prices above USD100 a barrel earlier in the week.
Iran is the world’s fourth largest oil producer, pumping nearly 5% of the world’s oil in 2011 and the second biggest exporter among the Organization of the Petroleum Exporting Countries.
Data showing that manufacturing activity in the euro zone rose to a two-month high in December also lent support. The report came after data showed that German manufacturing output also rose to a two-month high.
Meanwhile, the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.1% to trade at 81.17.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery jumped 0.93% to trade at USD105.20 a barrel, with the spread between the Brent and crude contracts standing at USD9.51 a barrel.
Forexpros
