Oil seesaws, Brent turns lower following Wall Street

Thu Sep 3, 2015 2:08pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices seesawed on Thursday in line with volatile U.S. equities, rising early as market bulls supported prices for a second day, then retreating, with global benchmark Brent falling into negative territory.

Despite data on Wednesday showing a huge build in U.S. crude inventories, oil rallied early in New York trade as investors regained their appetite for risk due to a respite in bad news out of China and the potential for more European monetary easing.

But oil prices came sharply off session highs by afternoon as stocks on Wall Street pared their early advance. Brent gave back all its gains and turned lower.

"Early strength and now a late fade," Donald Morton, an oil trader with Fairfield, Connecticut-based Herbert J. Sims & Co., said, describing the action.

Brent's front-month contract LCOc1, was down 20 cents at $50.30 a barrel by 1:42 p.m. EDT. Earlier in the session, it had risen more than $2.

U.S. crude's front-month CLc1 was up 15 cents at $46.40, versus its session high above $48.

Wall Street's early rally faded in afternoon trading on caution ahead of a U.S. jobs report that will probably influence the Federal Reserve's position on a potential interest-rate hike.

Adding to early support for oil was the European Central Bank's pledge to keep monetary policy loose and to act promptly when needed, after weak inflation and growth forecasts.   Continued...

Pump jacks and pipes are seen on an oil field near Bakersfield on a foggy day, California January 17, 2015. REUTERS/Lucy Nicholson