Oil price rise but trend still downwards

Oil rose yesterday after one of its biggest sell-offs this year but looked vulnerable to more falls after China’s stock market took another tumble and Greece moved closer to leaving the eurozone.

Investors kept a close eye on talks in Vienna over Tehran’s nuclear programme that could lead to increased exports of Iranian crude at a time of global oversupply.

Brent crude for August was up 90 cents at $57.44 a barrel, following a more than 6 per cent drop in the previous session.

On Monday, Brent briefly touched $56.38, its lowest since April 10.

US crude traded at $53.10, up 57 cents from the close on Monday, when it reached levels last seen in mid-April.

Despite the rally, most analysts were bearish.

“After Monday’s sharp and fierce sell-off it is impossible to paint an even remotely bullish technical picture,” said Tamas Varga, analyst at brokerage PVM Oil Associates.

“The downtrend should resume shortly.”

Influential US investment bank Goldman Sachs said the fall in oil prices was a consequence of oil market oversupply

“While last week’s decline in oil prices coincided with the escalation of the Greek crisis and weakness in other macro markets, the catalysts for crude’s $6 a barrel move lower have little to do with Greece in our view.”