Brent crude oil jumps back over $60 after 'Black Friday' plunge

Oil prices on Monday clawed back some losses from a nearly 8 percent plunge the previous session, with Brent jumping back above $60 per barrel, but sentiment remained weak amid a broad sell-off in financial markets in past weeks. Front-month Brent crude oil futures LCOc1 rose $1.31, or 2.2 percent, to $60.11 per barrel by 0643 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1, were up 66 cents, or 1.3 percent, at $51.08 per barrel. The gains partly made up for Friday’s selloff, which traders have already dubbed ‘Black Friday’. Reacting to Friday’s falls in Brent and WTI, China’s Shanghai crude futures on Monday ISCcv1 fell by 5 percent, hitting their daily downside-limit.

The downward pressure comes from surging supply and a slowdown in demand growth which is expected to result in an oil supply overhang by next year. “2019 will be a choppy year for the oil market as questions surrounding the prospect of a slowing global economy and a supply surplus are expected to increase,” analysts at Fitch Solutions said on Monday. Fitch said that even an expected supply cut led by the Organization of the Petroleum Exporting Countries (OPEC) following an official meeting on Dec. 6 “may not be enough to counteract the bearish forces.”

Oil markets are also being affected by a downturn in wider financial markets. Oil markets have also been weighed down by a strong U.S.-dollar .DXY, which has surged against most other currencies this year, thanks to rising interest rates that have pulled investor money out of other currencies and also assets like oil, which are seen as more risky than the greenback.