World oil prices bounce on bargain hunting

Oil prices rallied Wednesday on bargain hunting after a recent slump sparked by the end of a Norwegian oil workers' strike and before the latest US energy inventories data. Brent North Sea crude for delivery in August advanced $1.20 to $99.17 per barrel in early afternoon deals in London. New York's main contract, light sweet crude for August, jumped $1.33 to $85.24. Later Wednesday, the US Energy Information Administration (EIA) will publish its weekly report on American crude stockpiles for the week ending July 6. "Crude oil prices are seeing a little bounce today, following yesterday's sell-off -- in part predicated upon the progress in the Norway negotiations -- ahead of the EIA figures out later today," said Sucden analyst Jack Pollard. "Meanwhile, crude prices are gaining support from the broader commodity complex with metals seeing similar bounces as the dollar comes off a little." Prices tumbled by more than two dollars on Tuesday after Norway halted an oil workers' strike that threatened production, while news of weak Chinese crude imports raised demand concerns. Norwegian production was being increased to make up for the supply disruption, with state-owned giant Statoil, the company most affected by the strike, saying it expected normal output levels by the end of the week. Oil, which had been oversold in late New York trade Tuesday, was returning on Wednesday to a more stable level, according to Justin Harper, market strategist for IG Markets Singapore. "It's a slight sort of bounce back because it got hit quite hard overnight." Looking ahead, Harper said weak demand from the United States and China -- the world's largest oil and gas consumers respectively -- would put downside pressure on prices. "If you're looking at the demand side, there's still grim outlooks for US and China ... I'm not very bullish on oil at the moment," he said. The United States was hit by disappointing jobs numbers Friday in yet another blow to its efforts to kickstart the economy while data Tuesday showed China crude imports plunging to their lowest levels since December.