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Oil holds as traders search for floor to rout; Brent above $50

Published 01/08/2015, 12:48 PM
© Reuters. A man fills up his car at a petrol station in Rome
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By Barani Krishnan

NEW YORK (Reuters) - Global oil prices were little changed on Thursday, with better-than-expected U.S. jobs and other data helping the market hold steady after recovering from a four-day losing streak a day earlier.

But support for the market was likely to be short-lived as oil bears continue hunting a bottom for the second-biggest price rout in crude's history, traders said.

Some traders think oil prices could be at a crossroads after losing over half their value from June highs, and that could explain benchmark Brent crude's stalling at above $50 since Wednesday. Others think the market has just been handed a reprieve before moving another leg lower.

"I think there is selling fatigue and that's why you're seeing some short covering," said John Kilduff, partner at New York energy hedge fund Again Capital. "There are lots of folks out there still looking for a bottom. This thing is not over yet. Not by a long shot."

Brent slipped by 22 cents to $50.93 a barrel by 12:35 p.m. ET (1735 GMT). It had dropped to $49.66 on Wednesday, its lowest since May 2009.

U.S. crude was up a cent at $48.66, after plumbing a 5-1/2-year low of $46.83 in the previous session.

Weekly jobless claims in the United States showed the smallest layoffs in 17 years, a report by the U.S. Labor Department said. Monthly payrolls data for December, due on Friday, is expected to show the 11th consecutive month of job gains above 200,000, the longest such stretch since 1994.

Expectations that the European Central Bank could resort to stimulus measures after a rash of weak economic data and record crude imports by China in December, possibly due to attractive pricing, also helped sentiment, traders said.

But the world's largest oil traders have also started hiring supertankers to store crude at sea, marking a milestone in the build-up of the global glut of supplies, freight brokers and shipping sources said.

© Reuters. A man fills up his car at a petrol station in Rome

Trading firms, including Vitol , Trafigura and energy major Shell (L:RDSa) are among those that have booked crude tankers for up to 12 months, the sources told Reuters.

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