Oil rebounded in Asian trade on Tuesday after five straight days of losses, but trading was subdued due to concerns over the the strength of the global economic recovery and the impact on energy demand.
A sharp slowdown in second quarter growth in Japan, the world’s third biggest energy-consuming nation, affected market sentiment already spooked by weak economic data from the United States, analysts said.
New York’s main contract, light sweet crude for September delivery, was up 12 cents to 75.36 dollars a barrel in morning Asian trade.
Brent North Sea crude for delivery in October added four cents to 75.67 dollars.
Ken Hasegawa, energy desk manager of Newedge brokerage in Japan, said the market was paring down losses after prices fell over the past five trading days.
Oil prices began tumbling on Tuesday after the US Federal Reserve said US economic recovery in the near term was likely to be more modest than anticipated.
Hasegawa added that gross domestic product (GDP) figures from Japan released Monday showing lower-than-expected growth still had “some influence on the market.”
Japan’s GDP grew by an annualised 0.4 percent in the three months to June, down from a revised 4.4 percent in the previous three months, data showed. The GDP figure dashed market expectations for 2.3-percent growth.
“It seems that market participants remained cautious after the release of the Japanese figures while risk-aversion is back… amid these uncertain economic conditions,” said Sucden analyst Myrto Sokou.