Australian broker Jonathan Barratt says the price of oil still has a “lot more weakness”
Commodity prices have stabilised after markets were hammered by one of the biggest sell-offs in recent history.
Brent crude was up more than 1%, but US light crude stayed flat at $100 a barrel.
Silver continued to extend losses – shedding 5% early on Friday, after its biggest one-day fall in 31 years.
At the end of trade on Thursday in New York, commodity prices had tumbled, with oil falling nearly 9% after weak economic data from the US and Europe.
Victor Shum of Purvin and Gert energy consultants said oil markets were clawing back some of their loses, as traders capitalise on cheap crude prices and buy back into the market.
“Prices are up but this is not unusual after a massive sell-off, we are observing some market participants considering this as a buying opportunity,” he said.
But analysts warn the volatility in the markets could remain.
“When you have this kind of damage, it will take several weeks, or maybe several months, for people to be taken out, and for confidence to be rebuilt,” said Dennis Gartman, author of a markets guide.
“It’s not the end of the commodities cycle, not even close. You still have to call this a correction. It’s a sizable one and scared the heck out of everybody.”
Asian markets have slid in early trade in reaction to the commodities falls of Thursday.
The Nikkei 225 index shed 1.8%, South Korea’s Kospi index also dropped 1.8% and Hong Kong’s Hang Seng index slid 0.5%.
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