SINGAPORE: Oil edged up to $67 a barrel on Wednesday, recovering from the previous day’s losses as the dollar weakened against the euro and resource currencies like the Australian dollar.
This allowed crude to reverse losses from the previous day, when U.S. crude and distillates stock builds, a downgrade to U.S. energy demand and low consumer confidence data continued a string of bearish signals that has put crude on course for its first quarterly fall this year.
Not all news has been negative, with U.S. house prices rising for a third month, while a Chinese purchasing managers index for September released on Wednesday showed strong growth continues in the world’s second-largest oil consumer.
U.S. crude futures rose 29 cents to $67.00 a barrel after shedding 13 cents. London Brent crude gained 33 cents to $65.82 a barrel.
The markets are quiet ahead of China’s week-long holidays.
“Looking at the fundamentals, it is not justifiable for prices to be at current (strong levels),” said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd, adding that investment funds hold the view that $60 oil is cheap.
He said that despite better economic conditions in 2006, oil prices were still ranging around the $60-70 levels seen recently.
Slowing demand in the United States and other developed economies after the financial crisis pulled down crude from records near $150 a barrel in July 2008 to below $33 a barrel in December, although hopes of an economic rebound have since lent support.
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