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Oil Prices Rebound Above $67 | ASHARQ AL-AWSAT English Archive 2005 -2017
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LONDON (AFP) – Oil prices recovered on Thursday after plunging a day earlier on a surprise jump in US crude reserves.

New York’s main futures contract, light sweet crude for delivery in July, rose 1.16 dollars to 67.28 dollars a barrel.

Brent North Sea crude for July delivery gained 1.36 dollars to 67.24 dollars.

Analysts said crude prices were likely to continue to rise as investors were generally optimistic about the likelihood of a global economic recovery which would lead to a rebound in energy demand.

“I think the general trend upwards is generally intact,” said Jonathan Kornafel, Asian director of Hudson Capital Energy.

Prices however slumped on Wednesday from seven-month highs after a surprise jump in American crude reserves that indicated weaker-than-expected energy demand. On Tuesday, New York crude had surged to 69.05 dollars — the highest point since early November.

The US Department of Energy announced on Wednesday that American crude oil inventories leapt 2.9 million barrels in the week ending May 29 to reach 366 million barrels. Most analysts had expected a 1.7-million-barrel drop.

The weekly US government report is closely monitored by the market for indications of demand in the world’s biggest energy user.

The inventory data “served as a good excuse to sell into the overbought crude market,” said VTB Capital analyst Andrey Kryuchenkov.

This week, oil has punched seven-month peaks also on the back of a weakening US currency, which makes dollar-priced oil cheaper for holders of stronger currencies and in turn stimulates demand, pushing up prices.

Crude futures meanwhile also fell Wednesday on reports that some members of the Organization of Petroleum Exporting Countries (OPEC) were not adhering to agreed output cuts.

OPEC, which pumps 40 percent of world oil, cut its production target three times late last year to stabilise prices, which tumbled from record highs above 147 dollars in July to 32.40 dollars in December.

The group, which last week decided to keep output unchanged amid signs of economic recovery and higher crude prices, seeks to influence prices by setting an output quota, with members given individual production targets.

Crude oil futures had on Monday soared above 68 dollars a barrel for the first time in seven months, in part helped by news that the manufacturing sector in China had expanded for a third month.

China is the world’s second-biggest energy consuming nation behind the United States.

The Saudi Arabian cabinet said on Monday that it saw 75 to 80 dollars a barrel as a fair price for crude. Saudi Arabia, the world’s biggest oil exporter, is the de facto head of the OPEC oil producers’ group.