Oil Holds Ground as Traders Search for Bottom of Rout


Global oil prices were little changed for a second straight day on Thursday after better-than-expected U.S. jobs data helped the market hold ground after a 10 percent loss earlier in the week.

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But support for oil was likely to be short-lived as market bears continue hunting for a bottom to the second-biggest price rout in crude's history, traders said.

Some traders think oil prices could be at a crossroads after losing over half their value from June highs, and that could explain benchmark Brent's stalling at above $50 since Wednesday. Others believe the market has just been handed a reprieve before being hammered lower.

"I think there is selling fatigue and that's why you're seeing some short covering," said John Kilduff, partner at New York energy hedge fund Again Capital. "There are lots of folks out there still looking for a bottom. This thing is not over yet. Not by a long shot."

Brent crude <LCOc1> settled down 19 cents at $51.15 a barrel. It had dropped to $49.66 on Wednesday, its lowest since spring 2009.

But U.S. crude <CLc1> finished up 14 cents at $48.79, after plumbing a 5-1/2-year low of $46.83 in the previous session.

Brent had lost more than $5, or about 10 percent, in total in the first two days of this week.

Data on Thursday showed jobless claims in the United States fell last week, while a separate report said U.S. employers announced a total of 483,171 job cuts in 2014. That was 5 percent fewer than in 2013 and the smallest number since 1997.

Monthly payrolls data for December, due on Friday, is expected to show the 11th consecutive month of job gains above 200,000, the longest such stretch since 1994.

Expectations the European Central Bank could resort to stimulus measures after a rash of weak economic data and record crude imports by China in December, possibly due to attractive pricing, also helped sentiment, traders said.

But the world's largest oil traders have also started hiring supertankers to store crude at sea, marking a milestone in the build-up of the global glut of supplies, freight brokers and shipping sources said.

Trading firms, including Vitol <VITOLV.UL>, Trafigura <TRAFGF.UL > and energy major Shell <RDSa.L> are among those that have booked crude tankers for up to 12 months, the sources told Reuters.

(By Barani Krishnan; Additional reporting by Alex Lawler in London; Editing by Dale Hudson, William Hardy, Meredith Mazzilli and Chris Reese)