Oil recovered in Asian trade today after sharp overnight losses triggered by a larger-than-expected jump in US crude stocks,analysts said.
New York’s main contract,West Texas Intermediate crude for delivery in May,gained 49 cents to USD 101.96 per barrel while Brent North Sea crude for May settlement was up 33 cents at USD 122.67.
Investor sentiment had taken a hit after the US Department of Energy said yesterday in its weekly report that national crude reserves soared by nine million barrels in the week ending March 30.
That was a far bigger increase than the average estimate of 1.9 million barrels,according to analysts polled by Dow Jones Newswires.
Jonathan Barratt of Barratt’s Bulletin commodity research firm said today’s recovery in crude prices reflected an improvement in investor sentiment towards the US economy which is the world’s number one oil user.
The important thing to note is regardless what the numbers say is that the Fed has withdrawn any chance of a QE3,” Barratt said.
What this tells us is the Fed is comfortable with the US economy. The market is coming to a little bit more common sense.”
Minutes from the US Federal Reserve’s March 13 policy meeting published Tuesday eased the likelihood of a third round of quantitative easing (QE) to boost growth in the world’s largest economy.
The Federal Reserve has previously introduced two rounds of massive stimulus spending in an effort to kick-start the US economy.