U.S. crude oil rebounded to end sharply higher on Friday, after having plunged over 4 percent on Thursday, although concerns over demand growth and oversupply continue to plague market sentiments.
Oil prices found support with an official report from the Energy Information Administration earlier this week that showed U.S. stockpiles to have declined less than expected.
Oil has been hit by sluggishness in both the Asian and European economies, notwithstanding some strong signals of an improving U.S. economy. The ongoing troubles in the Middle East and Russia's entanglement with Ukraine have also hampered the growth prospects for oil.
Light Sweet Crude Oil futures for February delivery, the most actively traded contract, soared $2.77 or 5.1 percent to close at $57.13 a barrel on the New York Mercantile Exchange Friday.
Crude prices for February delivery scaled a high of $57.16 a barrel intraday and a low of $54.42.
Light Sweet Crude Oil futures for January delivery, plunged $2.41 or 4.4 percent to close at $56.52 a barrel on the New York Mercantile Exchange Friday.
Crude prices for January delivery scaled a high of $56.75 a barrel intraday and a low of $54.20.
On Thursday, crude oil futures for January delivery ended at $54.11 a barrel, down $2.36 or 4.2 percent after scaling a high of $58.73 earlier in the day, on renewed worries of oversupply and demand growth concerns. Short-covering and an upbeat jobless claims report supported oil early on, but the rally fizzled out as the day progressed.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 89.61 on Friday, up from its previous close of 89.24 late Thursday in North American trade. The dollar scaled a high of 89.65 intraday and a low of 89.18.
The euro trended lower against the dollar at $1.2228 on Friday, as compared to its previous close of $1.2285 late Thursday in North American trade. The euro scaled a high of $1.2306 intraday and a low of $1.2225.
In economic news, a report from the European Central Bank said the eurozone current account surplus declined notably in October, falling to a seasonally adjusted EUR 20.5 billion from EUR 32 billion in September.
German consumer confidence is set to improve to an eight-year high at the start of the year on strong gains in economic expectations and willingness-to-buy as the current economic weakness is viewed to be temporary, the market research group GfK said Friday. The forward-looking consumer confidence index climbed to 9 for January, the highest since December 2006, from 8.7 in December. The index was forecast to rise marginally to 8.8 points.
Elsewhere in Europe, the U.K. budget deficit narrowed in November, yet a considerable improvement is required to meet the government's fiscal target for 2014/15. Public sector net borrowing, excluding interventions, declined by GBP 1.6 billion from last year to GBP 14.1 billion in November, the Office for National Statistics reported Friday. Economists had forecast a shortfall of GBP 15.1 billion.
From Asia, the Bank of Japan left its monetary stimulus unchanged in order to assess the impact of its past massive easing. The unchanged stance came despite falling oil prices posing a threat to the central bank's 2 percent inflation target.
The material has been provided by InstaForex Company – www.instaforex.com