Oil
steadies after strong gains as equities rally
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[August 28, 2015] By
Christopher Johnson
LONDON (Reuters) - Oil prices steadied on
Friday after bouncing back from six-and-a-half-year lows on recovering
equities markets, strong U.S. economic growth and news of low crude
supplies from Nigeria.
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Oil saw its biggest one-day bounce since 2009 on Thursday, with
North Sea Brent <LCOc1> and U.S. light crude <CLc1> rising more than
10 percent. U.S. crude is on track for its first weekly gain in nine
weeks, ending its longest losing streak since 1986.
Global oil markets have fallen by a third since May and are still
well under half their value a year ago thanks to a huge oversupply
of fuel and sluggish demand. Worries over China's economy have
compounded the falls in recent weeks.
But analysts said oil markets fell too far, too fast and a rebound
was on the cards. A stock market rise, strong U.S. growth data and a
pipeline outage in Nigeria provided an excuse for a recovery on
Thursday, they added.
"A short-covering rally, led by crude oil, pushed commodities higher
across the board," analysts at ANZ said in a note to clients.
"Better-than-expected U.S. GDP numbers were the main spark, although
the force majeure on ... exports from Nigeria extended the gains."
Brent was down 15 cents at $47.41 a barrel by 1015 GMT. It settled
$4.42 higher at $47.56 on Thursday. U.S. crude was unchanged at
$42.56 a barrel, after ending up $3.96.
Asian shares extended a global rally on Friday with Chinese stocks
jumping for the second day following a rocky start to the week.
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The U.S. economy grew faster than initially thought in the second
quarter on solid domestic demand. Gross domestic product expanded at
a 3.7 percent annual pace instead of the 2.3 percent rate reported
last month, the Commerce Department said.
Shell's Nigerian unit declared force majeure on Bonny Light crude
oil exports on Thursday after shutting two key pipelines in the
country due to a leak and theft.
Venezuela has been contacting other members of the Organization of
the Petroleum Exporting Countries, pushing for an emergency meeting
with Russia to come up with a plan to boost oil prices, the Wall
Street Journal reported.
Officials at core OPEC members in the Middle East Gulf say there is
little chance of the cartel meeting without the support of Saudi
Arabia, which has said it sees no need for a gathering.
(Additional reporting by Meeyoung Cho and Aaron Sheldrick in Seoul;
Editing by Dale Hudson)
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