LONDON (Reuters) - Brent crude oil gained on Thursday, bouncing from a two-month low set the previous session, as a Spanish bond auction attracted strong investor demand, alleviating some concerns about the health of the euro zone economy.
Spain's Treasury issued 2.5 billion euros ($3.3 billion) in two- and 10-year bonds on Thursday at the top end of the targeted amount, although yields ticked higher than at the previous January auction.
Brent June crude gained 93 cents to $118.90 a barrel at 9:52 a.m. EDT (1352 GMT) after hitting $116.70 in the previous session, its lowest in more than two months.
May crude fell 6 cents to $102.61, after falling more than a dollar in the previous session. The May contract expires on Friday.
Some investors saw recent sharp falls as a good buying opportunity.
"Maybe this has marked the bottom of the market for oil," said Christopher Bellew at Jefferies Bache.
"There are plenty of potential catalysts that could push up the oil price - the effect of Iranian oil sanctions, good economic data from the United States would see funds pushing back into oil."
Revived fears about the euro zone's shaky finances had contributed to a 3.2 percent fall in the price of Brent this month, raising once again the prospects of economic decline and falling energy demand.
The number of Americans claiming unemployment benefits for the first time fell only slightly last week, data showed on Thursday, dampening hopes of a pick-up in job creation in April after March's slowdown.
Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 386,000, the Labor Department said. The prior week's data was revised to show 8,000 more applications received than previously reported.
Market observers said investors were worried about the potential for the oil market to make a sharp move in either direction.
"It's on a knife-edge. There is so much demand destruction for fuel going on already, which is causing weakness, but it can move very quickly higher if, for example, there is some stronger data," said Maarten van Mourik, an economist at trading house North Sea Group.
Eyes are also on next week's meeting of the policy-setting U.S. Federal Open Market Committee (FOMC), which will be closely scrutinized for any hints of a third round of quantitative easing, which could have an impact on oil prices.
A slowly improving U.S. jobs market and reasonably solid growth at the start of the year have brightened the economic outlook for 2012, reducing chances the Federal Reserve will conduct another round of bond purchases, a Reuters poll found.
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Spain's Treasury issued 2.5 billion euros ($3.3 billion) in two- and 10-year bonds on Thursday at the top end of the targeted amount, although yields ticked higher than at the previous January auction.
Brent June crude gained 93 cents to $118.90 a barrel at 9:52 a.m. EDT (1352 GMT) after hitting $116.70 in the previous session, its lowest in more than two months.
May crude fell 6 cents to $102.61, after falling more than a dollar in the previous session. The May contract expires on Friday.
Some investors saw recent sharp falls as a good buying opportunity.
"Maybe this has marked the bottom of the market for oil," said Christopher Bellew at Jefferies Bache.
"There are plenty of potential catalysts that could push up the oil price - the effect of Iranian oil sanctions, good economic data from the United States would see funds pushing back into oil."
Revived fears about the euro zone's shaky finances had contributed to a 3.2 percent fall in the price of Brent this month, raising once again the prospects of economic decline and falling energy demand.
The number of Americans claiming unemployment benefits for the first time fell only slightly last week, data showed on Thursday, dampening hopes of a pick-up in job creation in April after March's slowdown.
Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 386,000, the Labor Department said. The prior week's data was revised to show 8,000 more applications received than previously reported.
Market observers said investors were worried about the potential for the oil market to make a sharp move in either direction.
"It's on a knife-edge. There is so much demand destruction for fuel going on already, which is causing weakness, but it can move very quickly higher if, for example, there is some stronger data," said Maarten van Mourik, an economist at trading house North Sea Group.
Eyes are also on next week's meeting of the policy-setting U.S. Federal Open Market Committee (FOMC), which will be closely scrutinized for any hints of a third round of quantitative easing, which could have an impact on oil prices.
A slowly improving U.S. jobs market and reasonably solid growth at the start of the year have brightened the economic outlook for 2012, reducing chances the Federal Reserve will conduct another round of bond purchases, a Reuters poll found.
yahoo.com
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