Oil rebounds above $90 in Asian trade

WTI crude fell to $89.90 yesterday, while Brent tumbled $2.85 to $105.56

I / Singapore May 24, 2012, 10:25 IST

Oil rebounded in Asian trade today as investors bought into the market after prices fell below $90 a barrel the previous day, analysts said.

New York's main contract, West Texas Intermediate (WTI) crude for delivery in July was up 64 cents to $90.54 per barrel while Brent North Sea crude for July gained 92 cents to $106.48 in morning trade.

Prices had slumped a day earlier as the dollar rallied on eurozone debt worries, making dollar-denominated oil more expensive and denting demand.

WTI crude fell to $89.90 yesterday, its lowest level since October, while Brent tumbled $2.85 to $105.56.

"Prices have stopped sliding because some investors see this low level as a buy opportunity," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

He said prices remain under upward pressure because of the threat of supply disruptions in the Middle East and contagion risks arising from the eurozone debt crisis.

"The prospect of supply disruptions is still there. The US and European Union embargoes on Iranian oil will still go ahead as planned despite the current talks," added Shum.

Tough talks aimed at helping resolve the standoff between major producer Iran and the West over Tehran's controversial nuclear programme entered an unscheduled second day Thursday in Baghdad, with both sides still at odds with each other.

Investors' attention also remain focused on the eurozone debt crisis.

EU leaders at a summit overshadowed by fears Greece could leave the euro pledged support Wednesday for Athens, as officials behind the scenes considered the doomsday scenario of an exit.