Oil prices bounced back slightly Tuesday as Asian traders reacted to a slide the day before that pulled prices down more nearly US$3.
Light, sweet crude for May delivery rose 30 cents to US$61.81 in midmorning Asian electronic trading on the New York Mercantile Exchange. Trading was light as the market looked for fresh signals.
Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo predicted prices would not fluctuate much Tuesday, staying in the US$61-$63 range as traders eyed Iran's nuclear standoff with the West and awaited the weekly U.S. inventory report, due Wednesday.
"The market is bearish," Emori said. "The trend is actually heading to the downside."
Crude oil prices tumbled US$2.77 on Monday to settle at $61.51 a barrel following news of an oversupply at a key North American delivery point - in Cushing, Oklahoma. Some analysts said the news had a disproportionate effect on prices as geopolitical tensions still loom.
Iran announced Monday that it has begun enriching uranium on an industrial scale. President Mahmoud Ahmadinejad said the country was now capable of enriching nuclear fuel using 3,000 centrifuges. Some experts said the announced capabilities would fall far short of the material needed to run the plant.
The claim comes days after Iran defused another crises with the West by releasing 15 British sailors and marines it had held for 13 days for allegedly entering its waters. Oil prices rose more than US$5 a barrel - hitting six-month highs - after that March 23 detention.
Emori said the factors to watch this week were gasoline demand and supply in the United States.
Last week's annual report by the U.S. Energy Information Administration showed a larger-than-expected increase in gasoline supplies but lower refinery output. Many refineries have suffered unplanned outages in recent weeks.
In other Nymex trading Tuesday, natural gas rose a penny to US$7.556 per 1,000 cubic feet, and heating oil futures gained 0.93 cent to US$1.8250 a gallon.