Oil futures rose with the market open Thursday, recovering slightly from a decline the day before and at least temporarily arresting a slide that has knocked more than 15% off of prices since the start of March.
Light, sweet crude for June delivery was up 67 cents, or 0.7%, at $93.28 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange was down 32 cents, or 0.3%, at $109.43 a barrel.
The market was buoyed by initial jobless claims, which were lower than expectations but flat with the week earlier, and by the expiration Thursday of June-dated options, which was prompting some trading in the underlying contract, which expires Tuesday. The Traders also said they believed the market had become slightly over-sold, with prices settling at a 6-month low on Wednesday.
Still, the same weak fundamentals that have plagued the market for weeks remain present, with little change in sight, and traders say they don't see any significant upside for oil prices in the near future.
"I don't see the market warranting higher levels," said Tony Rosado, a broker at GA Global Markets. "The real emphasis is, the market is poor, the market looks like it still can work lower."
Crude prices fell 1.2% Wednesday to their fourth-consecutive low for the year, after government data showed U.S. oil inventories at a 22-year high, rising more than 10% in the last eight weeks on a combination of weakening demand and growing supply. The fundamentals in the market have been deteriorating for months, but were masked for a time as prices spiked on geopolitical tensions between Iran and the West over its fledgling nuclear program.
"This is a steep and damaging drop in oil prices that will have implications for the foreseeable future," Dominick Chirichella of the Energy Management Institute said in a note. "The uptrend that was in place since late last year (mostly geopolitically driven) has been broken and all technical signs point to a sustained downward trend going forward."
Front-month June reformulated gasoline blendstock, or RBOB, was about flat at $2.9216 a gallon. June heating oil was down 0.2% at $2.8924 a gallon.
--By Christian Berthelsen, Dow Jones Newswires; 212-416-2381; [email protected]