* Some investors see recent weakness as buying opportunity
* US benchmark oil down slightly
* US jobs data weighs on sentiment
By Simon Falush
LONDON, April 19 (Reuters) – Brent crude oil gained on
Thursday, bouncing from a two-month low set the previous
session, as a Spanish bond auction attracted strong investor
demand, alleviating some concerns about the health of the euro
zone economy.
Spain’s Treasury issued 2.5 billion euros ($3.3 billion) in
two- and 10-year bonds on Thursday at the top end of the
targeted amount, although yields ticked higher than at the
previous January auction.
Brent June crude gained 93 cents to $118.90 a barrel
at 1352 GMT after hitting $116.70 in the previous session, its
lowest in more than two months.
U.S. May crude fell 6 cents to $102.61, after falling
more than a dollar in the previous session. The May contract
expires on Friday.
Some investors saw recent sharp falls as a good buying
opportunity.
“Maybe this has marked the bottom of the market for oil,”
said Christopher Bellew at Jefferies Bache.
“There are plenty of potential catalysts that could push up
the oil price – the effect of Iranian oil sanctions, good
economic data from the United States would see funds pushing
back into oil.”
Revived fears about the euro zone’s shaky finances had
contributed to a 3.2 percent fall in the price of Brent this
month, raising once again the prospects of economic decline and
falling energy demand.
The number of Americans claiming unemployment benefits for
the first time fell only slightly last week, data showed on
Thursday, dampening hopes of a pick-up in job creation in April
after March’s slowdown.
Initial claims for state unemployment benefits slipped 2,000
to a seasonally adjusted 386,000, the Labor Department said. The
prior week’s data was revised to show 8,000 more applications
received than previously reported.
Market observers said investors were worried about the
potential for the oil market to make a sharp move in either
direction.
“It’s on a knife-edge. There is so much demand destruction
for fuel going on already, which is causing weakness, but it can
move very quickly higher if, for example, there is some stronger
data,” said Maarten van Mourik, an economist at trading house
North Sea Group.
Eyes are also on next week’s meeting of the policy-setting
U.S. Federal Open Market Committee (FOMC), which will be closely
scrutinized for any hints of a third round of quantitative
easing, which could have an impact on oil prices.
A slowly improving U.S. jobs market and reasonably solid
growth at the start of the year have brightened the economic
outlook for 2012, reducing chances the Federal Reserve will
conduct another round of bond purchases, a Reuters poll found.
