Oil Rebounds to More Than $66 After Tumbling 4.5%

24 September 2009 (Last Updated September 24th, 2009 18:30)

Oil rebounded to more than $66 a barrel on Friday, after a drop of more than 4% to its lowest in eight weeks, reported Reuters. US Government data showed a large build in US crude oil stockpiles earlier in the week and oil prices are on track to snap two straight weeks of gains

Oil rebounded to more than $66 a barrel on Friday, after a drop of more than 4% to its lowest in eight weeks, reported Reuters.

US Government data showed a large build in US crude oil stockpiles earlier in the week and oil prices are on track to snap two straight weeks of gains and post a drop of nearly 8% this week, making their worst weekly performance in about two months.

US crude for November delivery was up $0.18 at $66.05 a barrel by 3am EDT, after settling at $3.08 on Thursday.

London Brent crude gained $0.29 to $65.44.

Analysts said that oil's gain on Friday was largely a technical rebound, with demand and supply fundamentals still weak and showing little sign of improvement, according to Reuters.

Crude prices tumbled 4.5% on Thursday as traders shrugged off a positive report of a fall in the number of US workers filing for jobless benefits claims.

Additional pressure came from a report that Opec seaborne oil exports, excluding Angola and Ecuador, will rise 160,000 barrels per day in the four weeks leading up to 10 October.

Oil has traded in a wide band of between $65-$75 in the past month and most analysts agree that prices would only break out of the $75 range when the supply glut in the US - where oil stockpiles are about 9% higher than its five-year average levels - starts to ease.