Oil market rebounds slightly

London: World oil prices rose Wednesday on bargain-hunting after sharp falls the previous day triggered by a strong US dollar and global supply glut concerns, analysts said.

In early afternoon London deals, Brent North Sea crude for July added 36 cents to $64.08 per barrel, compared with Tuesday´s closing level.
US benchmark West Texas Intermediate (WTI) for delivery in July won 43 cents to $58.46 a barrel.

Crude futures had shed more than $1.60 on Tuesday, as markets in the United States and much of Europe reopened after a public holiday on Monday.

Oil prices have been under pressure on a resurgent dollar, which has strengthened following expectations that the US Federal Reserve will follow through on plans to raise record-low interest rates later this year.

The stronger greenback makes crude more expensive for buyers using weaker currencies.

“As the prices for crude dropped quite sharply last night, the current rebound is due to bargain hunting as traders pounce at the low prices,” Nicholas Teo, market analyst at CMC Markets in Singapore.

Teo said dealers are also awaiting the latest official US stockpiles report for fresh clues about demand and production levels in the world´s top crude consumer.

Crude reserves likely fell by 1.5 million barrels in the week to May 22, according to a survey by Bloomberg News.

Overall US stockpiles, which stand at 482.2 million barrels, are at the highest level since 1930, according to data compiled by the US Energy Information Administration.

The weekly report is normally published every Wednesday but will be issued this Thursday due to the US public holiday on Monday.

Dealers have been hoping that a slowdown in US output, coupled with increased demand during the summer driving season, could whittle down the build up of global crude reserves, which was a key reason for the collapse in prices of more than 50 percent between June and January.