NEW YORK (Reuters) - Oil rose almost 3% on Monday as U.S. recession fears eased and some traders took the view that crude’s recent price slide was overdone with three straight weekly declines for the first time since November.
A healthy U.S. jobs report for April helped oil to climb by about 4% on Friday even though labor market strength could compel the Federal Reserve to keep interest rates higher for longer.
Brent crude was up $2.05, or 2.7%, at $77.35 a barrel by 1330 GMT. U.S. West Texas Intermediate (WTI) crude also gained $2.05, or 2.9%, to $73.39.
“Oil’s rebound follows energy stocks’ comeback on Wall Street last Friday after the U.S. reported strong job data, which eased concerns about an imminent economic recession,” said CMC Markets analyst Tina Teng.
Brent had finished last week with a decline of about 5.3% while U.S. crude plunged by 7.1% even after Friday’s rebound. Both benchmarks were down for three weeks in a row for the first time since November.
Ole Hansen, head of commodity strategy at Saxo Bank, said oil’s recent drop looked excessive.
“An oversold market condition combined with Brent managing to find support ahead of the March low forced recently established short sellers to seek cover, potentially highlighting that the recent sell-off was overdone,” he said.