Oil prices rebound

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World oil prices rebounded Friday, recouping some of the previous day's losses, as traders snapped up bargain crude ahead of crucial non-farm payrolls data in the United States.

Brent North Sea crude for delivery in September climbed 75 cents to $106.65 per barrel in late morning London deals.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for September, jumped $1.06 to $88.19 a barrel.

Investors were turning their attention to the release of US non-farm payrolls data for July, due out later Friday, for clues on the health of the world's largest economy and the number one oil-consumer, analysts said.

“Traders will be positioning themselves ahead of non-farm payrolls data tonight which have not had their usual frenzied build-up as markets have been distracted by central bank meetings this week,” said Justin Harper, IG Markets Singapore's market strategist.

The US economy was expected to have created 100,00 new jobs in July compared with 80,000 in June, Singapore's DBS Bank said in a market commentary.

Crude futures sank in New York on Thursday after the European Central Bank announced no immediate action on the eurozone sovereign debt crisis, disappointing investors and sending global stock markets tumbling.

Sentiment was also dented this week after the Bank of England and the US Federal Reserve also failed to deliver further monetary stimulus measures to aid the flagging global economy.

ECB president Mario Draghi, after a one-day monetary policy meeting on Thursday, revealed no concrete measures to ease eurozone debt tensions.

In reaction, investors shunned risky assets and sent world equity markets reeling.

Draghi had heightened investor hopes of fresh ECB action after vowing last week to “do whatever it takes to preserve the euro”.

“If you raise the bar, best not jump under it, which is exactly what Mario Draghi did yesterday,” said PVM Associates oil analyst David Hufton.

“Earlier this week, the Federal Reserve disappointed ever hopeful markets on quantitative easing.

“Yesterday morning, the Bank of England continued the wait-and-see approach, putting even more pressure on the ECB to produce. They produced words and not actions.”

He added: “The markets were not amused... WTI responded to risk-off sentiment with a fall of $1.78.”

Crude oil prices also dipped on Thursday as the European single currency fell against the dollar.

A stronger US currency makes dollar-denominated oil less attractive to buyers using weaker currencies, tending to dent crude demand and prices.

Oil had risen on Wednesday, boosted by a sharper-than-expected drop in US crude stockpiles that sparked hopes for stronger demand in the biggest oil-consuming country.

Data showed that US crude stockpiles fell 6.5 million barrels in the week ending July 27, instead of the much smaller drop of 800,000 barrels expected by analysts, indicating demand was holding up. - Sapa-AFP


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