Oil rose in New York, rebounding from the biggest weekly decline since 2008, as signs that the global economic recovery remained intact stoked speculation the slump was exaggerated.

Futures climbed as much as 3.6 percent, snapping a five-day losing streak, after a report on Monday showed German exports surged in March to the highest monthly value ever recorded and the U.S. Labor Department said May 6 that payrolls expanded more than forecast. The world economy isn’t weak enough to justify a freefall in prices, Qatar Oil Minister Mohammed bin Saleh al- Sada said on Sunday.
“Energy prices are rebounding sharply and no one really should be surprised given that West Texas Intermediate fell nearly $19 from the start of last week through the close on Friday and that Brent fell $21,” Dennis Gartman, economist and editor of the Suffolk, Virginia-based Gartman Letter, said on Monday in a note. “Weakness of that magnitude deserves bounces of $4 to $6 a barrel easily.”
Crude for June delivery increased as much as $3.51 to $100.69 a barrel in electronic trading on the New York Mercantile Exchange. It was at $100.18 at 12:41 a.m. London time. On May 6, the contract fell 2.6 percent to $97.18, the lowest settlement since March 15.
The market is undergoing a “technical rebound” after last week’s losses, said Andrey Kryuchenkov, an analyst in London at VTB Capital, a unit of Russia’s second-largest bank. “There are still major supply issues” underpinning prices, he said.
Oil slumped 15 percent last week, the biggest drop since December 2008. Prices are up 30 percent in the past year.
-------------------Brent crude
Brent crude for June settlement on the London-based ICE Futures Europe exchange rose as much as $4.06, or 3.7 percent, to $113.19 a barrel.
“Brent has recovered a little and risen to $111 a barrel as the new trading week kicks off,” Commerzbank AG analysts led by Eugen Weinberg in Frankfurt said in a note. “Some market players see the lower price level as a buying opportunity.”
Hedge funds were caught with bullish bets near record highs last week as oil in New York plunged.
Large speculators reduced net-long positions by 2.4 percent to 293,823 futures and options in the seven days to May 3, according to the U.S. Commodity Futures Trading Commission’s weekly Commitments of Traders report. That’s still within 5.7 percent of an all-time high in March.
-------------------German exports
German exports, adjusted for work days and seasonal changes, jumped 7.3 percent from February, when they gained 2.8 percent, the Federal Statistics Office in Wiesbaden said. Economists had forecast a 1.1 percent increase, according to the median of 10 estimates in a Bloomberg News survey. Exports were worth 98.3 billion euros ($141.4 billion) in March, the most since records began in 1950, the statistics office said.
The euro advanced against the dollar after the report was released, increasing commodities’ appeal as an alternate investment, said Ole Hansen, senior manager of trading advisory at Saxo Bank A/S in Copenhagen.
Brent, the benchmark for Europe and Africa, has rallied 19 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and disrupted exports from Libya, a member of the Organization of Petroleum Exporting Countries.
JPMorgan Chase & Co. raised its oil-price forecasts because OPEC and other producers aren’t matching rising demand and consumers will take time to react to higher prices.
-----------------Forecast raised
The bank boosted its 2011 Brent crude forecast to $120 a barrel from $110, and changed its estimate for West Texas Intermediate crude to $109.50 from $99.
“While financial bushfires or perhaps a rapid resolution to the Libyan civil war could radically alter market dynamics, the balance of both risks and fundamentals still points to a supply-constrained world,” JPMorgan analysts led by New York- based Lawrence Eagles wrote in a report on May 6.
Supplies of crude and petroleum products in the U.S. may be curtailed by high water levels on the Mississippi River, the largest waterway in the U.S. Operations could be threatened at riverside refineries owned by Valero Energy Corp., Marathon Oil, and Exxon Mobil.
“One of the supplies risk for the next two weeks will come from the rising level of the Mississippi River,” Olivier Jakob, managing director of Switzerland-based researcher Petromatrix GmbH, said in a note.
(Source: Bloomberg)