Sun, Feb 20, 2005 - Page 10 News List

Crude oil futures rebound as traders hunt for bargains

AP , VIENNA, AUSTRIA

Crude oil futures prices rebounded above US$48 a barrel in thin trading on Friday on the back of bargain-hunting by traders following a drop in prices the previous day.

Still, analysts said that after the volatility of the past few days, sparked by tensions over Iran and a relatively bullish OPEC report, markets would likely settle into a narrow range in the coming days.

On the New York Mercantile Exchange, light sweet crude for March delivery rose US$0.81 to settle at US$48.35 a barrel, erasing Thursday's US$0.79 decline. March heating oil prices rose US$0.0365 to US$1.3493 a gallon on Nymex, which closed early at 1pm ahead of the Presidents Day holiday in the US.

In London, Brent crude for April delivery rose US$0.52 to US$46.34 on the International Petroleum Exchange in London.

Victor Shum, oil analyst at Purvin & Gertz, an energy consulting agency, said that trading volumes will remain sluggish until Presidents Day tomorrow.

"Because of the public holiday, we can expect trading volume to be thin for the next few days," Shum said.

In London, oil price strategist Adam Sieminski of Deutsche Bank said he expected "lack of news" to dominate next week.

"So maybe the price will calm down a bit," he said. "But the underlying fundamentals are still very robust, so if the price does go down, it won't be by very much."

Prices had surged following a prediction from the Organization of Petroleum Exporting Countries that daily global demand would rise to 83.8 million barrels this year, a 5 percent increase on the group's estimate last month.

Separately, an explosion in Iran briefly spiked oil prices on Wednesday, reflecting traders' jitters about the possibility of attack.

Oil prices have been rising on most days over the past week on worries that OPEC -- which controls 40 percent of world oil exports -- might cut production at its March 16 meeting in Isfahan, Iran.

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