Oil prices rebound strongly

AFP, Monday 9 May 2011

Recovery from last week's sharp drop is spurred by positive employment data from US, while OPEC nations believe supply and stock levels are healthy

Crude oil prices bounced back sharply on Monday after last week's huge drop caused by evidence of dampening demand for energy.
Brent North Sea crude for delivery in June jumped US$3.24 to $112.37 a barrel in late morning trade in London.

New York's main contract, light sweet crude for June, gained $2.91 to $100.09 a barrel.

Victor Shum, a Singapore-based analyst from Purvin and Gertz international energy consultancy, said prices were "primarily reacting to the very sharp loss late last week, which was too much and too fast."

Prices were also recovering in the wake of positive employment data from the United States, the world's biggest oil consumer, traders said.

The US Labor Department's stronger-than-expected jobs creation data hinted at a growing economy, although the overall unemployment rate also rose to nine per cent.

Friday's data was welcomed by markets "so we have seen some recovery in oil prices, and the sharp drop (of) last week is likely to be temporary," Shum told AFP.

Meanwhile, Qatar's Energy Minister Mohammed Saleh al-Sada told reporters on Sunday that an upcoming OPEC meeting could not be expected to make any major change to oil output, insisting production and supplies were at healthy levels.

"We think the fundamentals are fine and we can't see shortage of supply. OPEC countries and non-OPEC countries are producing and supplying and satisfying the world demands," he said.

"Clearly the supply level and the stocks level is healthy, and we are after the stability of oil prices."

The Organization of Petroleum Exporting Countries (OPEC), which pumps out about 40 per cent of the world's oil, holds its next policy meeting on 8 June in Vienna.

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