By Eric Yep
Brent crude recovered marginally in Asian trade Friday while Nymex crude mostly traded flat after both benchmarks lost more than 2% overnight.
On the New York Mercantile Exchange light, sweet crude futures for delivery in September traded at $95.65 a barrel at 0434 GMT--up $0.07 in the Globex electronic session. October Brent crude on London's ICE Futures exchange rose $0.48 to $102.55 a barrel.
Weaker-than-expected euro-zone economic growth data, conciliatory talk from Russian President Vladimir Putin, reports of Iraqi Prime Minister Nouri al-Maliki stepping down and Libya reopening its largest export port have all added to negative sentiment for oil, analysts said.
Weak supply-demand fundamentals are keeping Brent in a contango structure--where the front-month contract is cheaper than future contracts--triggering demand for floating storage, traders said.
Traders are still waiting for the overhang of surplus oil shipments from West Africa to clear which will indicate an increase in demand in European and Asia markets.
Earlier this week consultant company Energy Aspects said the Brent market will be slow to recover as a lot of West African crude has ended up in storage owing to low prices and isn't really being used up by refineries.
The recent price drop has extended the recent downtrend and spoiled the market's latest recovery attempt--underscoring the difficulty in trying to pick a bottom, Tim Evans at Citi Futures said in a report.
He said the real oversupply issue for the oil market is money managers whose speculative barrels have been flowing back onto the market as traders cut losses.
"We're not sure at what point the managed money selling will be exhausted but we do see the market as oversold with lots of potential for a new cycle of buying," Mr. Evans said.
Nymex reformulated gasoline blendstock for September--the benchmark gasoline contract--rose 169 points to $2.6835 a gallon while September heating oil traded at $2.8364--169 points higher.
ICE gasoil for September changed hands at $867.25 a metric ton, up $0.50 from Thursday's settlement.
Write to Eric Yep at firstname.lastname@example.org
(END) Dow Jones Newswires
August 15, 2014 02:18 ET (06:18 GMT)
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