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Oil prices rebound from sharp selloff; more volatility expected

Published 10/02/2016, 01:32 pm
Updated 10/02/2016, 01:40 pm
© Reuters.  Oil prices rebound from sharp selloff; more volatility expected
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* Iran says open to cooperation with Saudi Arabia

* IEA, EIA lower demand forecasts

* Coming up: US EIA weekly inventory data due 1530 GMT

By Jacob Gronholt-Pedersen

SINGAPORE, Feb 10 (Reuters) - Crude oil prices pushed higher on Wednesday after Iran said it was open to cooperation with Saudi Arabia, partly recovering from an 8 percent fall in the previous session led by concerns over demand and weak equities.

Prices were supported by comments from Iran's oil minister that Tehran is ready to negotiate with Saudi Arabia over the current conditions in global oil markets. International Energy Agency (IEA), meanwhile, said the Organization of Petroleum Exporting Countries (OPEC) is unlikely to cut a deal with other producers to reduce ballooning output. It predicted the world will store unwanted oil for most of 2016 as declines in U.S. oil output take time. day of heightened volatility is expected as concerns over global growth prospects remain elevated," analysts at ANZ said in a note.

The front-month Brent contract LCOc1 was 75 cents, or 2.5 percent, higher at $31.07 a barrel by 0219 GMT. The contract fel for a fourth straight session on Tuesday to end down $2.56, or 7.8 percent.

U.S. crude for March delivery CLc1 was 58 cents higher at $28.52 a barrel. The contract fell 5.9 percent on Tuesday to settle $1.75 lower.

Further weighing on prices on Tuesday, the U.S. Energy Information Administration (EIA) lowered its 2016 oil demand growth forecast to 110,000 barrels per day (bpd) from a growth of 160,000 bpd previously. remains susceptible to further weakness as the market digests (Tuesday's) data," ANZ said.

Oil investors will turn to weekly inventory data by U.S. Energy Information Administration (EIA) later on Wednesday, with analysts surveyed by Reuters predicting a 3.6 million-barrel rise in crude stocks last week. EIA/S

The American Petroleum Institute (API), an industry group, reported a build of 2.4 million barrels in U.S. crude stockpiles for last week. API/S

Seeking additional protection against wild swings in prices, oil traders have scrambled to scoop up options, sending a key index to its highest level since the worst of the global economic crisis in 2008, data showed.

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