(MENAFN- Trend News Agency) Oil prices recovered slightly on Thursday but were unable to
claw back the more than 9% decline in the previous three days as
demand concerns in major consumers overrode signals that the U.S.
may pause its interest rates increases, trend reports with reference to reuters .
Brent futures rose 17 cents, or 0.2%, to $72.50 a barrel by 0257
GMT. Since Friday, however, brent has dropped more than 9% and
earlier on Thursday fell to as low as $71.28.
U.S. West Texas Intermediate (WTI) crude rose 2 cents, to $68.62
a barrel. WTI dropped almost 11% from Friday to Wednesday's close
and earlier on Thursday fell to as low as $63.64.
Prices have plunged this week amid signs of weak manufacturing
growth in China, the world's largest oil importer, and after the
U.S., the world's biggest oil user, raised interest rates to their
highest since 2007 on Wednesday, which threatens future economic
growth there.
Still, with some positive growth in the U.S. services sector and
expectations that output cuts by major producers that started this
month will limit supply, investors and analysts are buying back
into the market.
"Oil is starting to find some support as all the bad supply and
demand news has been priced in," said Edward Moya, an analyst at
OANDA.
While the Fed raised interest rates by a quarter of a percentage
point as expected, it signaled it may pause further increases to
give officials time to assess the fallout from recent bank failures
and wait for clarity over the dispute over raising the U.S. debt
ceiling.
The collapse of the third U.S. bank since March, spurred by
their inability to manage rising interest rates, has also weighed
overall financial markets.
The Organization of the Petroleum Exporting Countries (OPEC)and
allies including Russia, a group known as OPEC+, started voluntary
output cuts of around 1.16 million barrels per day at the beginning
of this month and those are expected to support the market going
forward into the summer peak demand period.
"It seems like OPEC+ will have pressure to finally show they can
meet those production cut quotas and possibly be in a position to
signal more cuts are coming," Moya said.
Investors are also awaiting developments from the European
Central Bank, which is set to raise interest rates for the seventh
meeting in a row on Thursday.
Chinese demand concerns continue to weigh on the market
especially after a private sector survey showed on Thursday that
factory activity unexpectedly dipped in April due to softer
domestic demand.