Brent rebounds above $71 in turbulent oil market

Wed Dec 3, 2014 3:49am EST
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By David Sheppard

LONDON (Reuters) - Brent rose to $71 a barrel on Wednesday, recovering some of its losses from the previous session as a turbulent market searched for a price floor after a nearly 40 percent fall since June.

Oil has seen choppy trade since the Organization of the Petroleum Exporting Countries (OPEC) said last week it would not lower output despite an oversupplied market.

Brent hit a five-year low below $68 a barrel on Monday after averaging around $110 a barrel for the last three years.

"The market's volatility is a result of people working out what's going to happen next," said Jonathan Barratt, chief investment officer at Ayers Alliance Securities.

"Prices should find a volatile low at these levels," he added, arguing oil producers hurt by a drop in revenues may still trim output despite OPEC's formal decision.

Brent for delivery in January LCOc1 rose 62 cents to $71.16 a barrel by 0839 GMT (03:39 a.m. EST) after falling $2 on Tuesday. It was slightly off a day high of $71.46.

U.S. crude for January delivery CLc1 was at $67.54 a barrel, off the day's high of $67.97, but up 66 cents from the previous session when prices dropped more than $2.

OPEC's oil supply fell by 340,000 barrels per day (bpd) in November as a recovery in Libya faltered, a Reuters survey found, although a lack of deliberate cutbacks by Saudi Arabia and other key members underlines their focus on defending market share.   Continued...

An offshore oil platform is seen in Huntington Beach, California September 28, 2014. REUTERS/Lucy Nicholson