Crude prices bounced back from eight month lows in Asian trade Friday, Jan 10 on bargain hunting and concerns over the intensifying conflict in South Sudan, AFP reports.
New York's main contract, West Texas Intermediate (WTI) for February delivery was up 84 cents to $92.50 a barrel in afternoon trade, while Brent North crude for February gained 40 cents to $106.79.
WTI prices hit their lowest levels since May 1 on Thursday, weighed down by high U.S. crude and product stockpiles that suggest supplies continue to outpace demand, giving an opportunity for investors to hunt for bargains.
A cold snap sweeping across North America has also boosted demand for heating fuel, and helped push prices higher.
"The surge in demand for heating fuels will inevitably raise the demand for crude oil, which is used as a feedstock for heating fuels. As such, crude oil prices are likely to be well supported," Phillip Futures said in a market commentary.
Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at consultancy firm Ernst and Young, said however that high U.S. inventories "continued to pressure prices lower".
Data released Wednesday showed that U.S. weekly crude oil inventories fell by 2.7 million barrels, exceeding analysts' predictions. Gasoline stockpiles, however, were up.
Investors were also monitoring developments in oil-producing South Sudan after the government's peace talks with rebels reached a deadlock. The country's oil production has dropped by around a fifth because of the fighting, depriving the impoverished nation of a key source of foreign currency.
Michael McCarthy, chief market strategist at CMC market in Sydney, said the intensifying conflict is "probably insignificant" in terms of oil prices in the global market. "But it's a reminder for the potential of disruption in oil supplies," he told AFP.
