Brent rebounds to US$71 but downtrend seen continuing

London

BRENT oil rose to US$71 a barrel on Wednesday in choppy trading as the market searched for a price floor after a near 40 per cent fall since June. Trade in oil has been volatile since the Organization of the Petroleum Exporting Countries (Opec) said last week that it would not lower output despite an oversupplied market.

Brent hit a five-year low below US$68 a barrel on Monday after averaging around US$110 a barrel in 2011 to 2013. "There has been a technical bounce back from the very strong declines that we have seen in the lead-up to and after the Opec meeting," said Harry Tchilinguirian, an oil analyst at BNP Paribas in London. "Seeing some rebound is normal, but the downtrend remains in place. It is possible that we can go down further."