Oil market forges ahead after strong rebound

By Roland Jackson, AFP

LONDON–London’s Brent crude for February delivery advanced 76 cents to US$62.14 per barrel in late Monday morning deals, and U.S. benchmark West Texas Intermediate (WTI) for February climbed 53 cents to US$57.66 a barrel. The gains extended a rebound on Friday, wiping out losses earlier last week that saw prices hit fresh five-year lows on the back of ample supplies and mounting demand worries.

Oil has however shed about half its value since June, and a decision in November by the Organization of Petroleum Exporting Countries (OPEC) to maintain output levels despite falling prices has weighed heavily on the market. ��Brent crude is up … boosting energy shares across the FTSE,�� added ETX Capital analyst Daniel Sugarman. ��Tullow Oil, always sensitive to oil fluctuations, is currently up, as are both BP and Royal Dutch Shell.�� In London, Tullow Oil stock added 1.46 percent to 430.40 pence, while BP gained 1.39 percent to 418.72 pence and Shell’s ��B�� share price added 2.17 percent to 2,270.79 pence. French oil and gas giant Total was the biggest winner on the CAC index in Paris. Shares were 2.57 percent higher at 43.96 euros. Rising oil prices lift the energy sector because they boost company profits. Trading volumes meanwhile remained low with many investors away from their desks for the traditional Christmas and New Year holiday shutdown. The Frankfurt stock market closes for Christmas after the close on Tuesday, while London and Paris will shut down at lunchtime on Wednesday. Focus ‘remains on oil’ ��As we head towards the Christmas break and a short week, the main focus going forward is likely to remain on the recent volatility in the oil price, particularly if we get a fresh bout of selling pressure,�� said CMC Markets analyst Michael Hewson. He added there were widespread concerns that further oil-market declines ��could prompt instability in oil producing countries like Venezuela, Angola, Nigeria and Ecuador, and of course not forgetting Russia, as these countries struggle to balance their books, against a weakening currency, and a much weaker oil price.��

In Monday deals on the London Bullion Market, gold firmed to US$1,196.32 per ounce from US$1,195.50 on Friday.