US crude bounces up $6.01/bbl following oversell

17 September 2008 21:15  [Source: ICIS news]

HOUSTON (ICIS news)--NYMEX light sweet crude futures for October delivery settled on Wednesday at $97.16/bbl, up $6.01 on a huge corrective bounce from oversold conditions.

The market also received strong support from the weekly inventory report from the Energy Information Administration (EIA), which showed a substantial drawdown in crude and gasoline stocks.

October crude had bottomed out at $90.51/bbl on Tuesday, having lost $10.00/bbl during two sessions in spite of the disruptions caused by Hurricane Ike in the Gulf of Mexico; the market was showing signs of being oversold.

Wednesday’s rally lifted the front month up to $97.45/bbl before settling just off the top of the range.

The EIA statistics showed crude oil inventories declining more than forecast and gasoline stocks declined for the eighth consecutive week.

The US dollar slipped versus the euro and also encouraged length acquisition in commodities.

ICE Brent for November delivery spiked to $95.13/bbl and settled at $94.84/bbl, up $5.62.

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By: Ignacio Sotolongo
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