Written by Bob Burton.
Crude oil prices were rising during the electronic trading session of the New York Mercantile Exchange this morning (August 25th), rising back above $72 a barrel.
Yesterday, crude extended losses and prices approached $70 a barrel before settling at $71.63, with the late rally staged by traders perceiving the five-day slump may be excessive.
"Oil is perhaps dropping too much, too fast for traders and investors and some see this as a buying opportunity," explained Victor Shum, a senior principal at Purvin and Gertz in Singapore, speaking to Bloomberg.
"When it gets close to the $70 level, it presents an attractive opportunity to buy," he added.
The rally comes ahead of the latest weekly demand report from the Energy Information Administration due to be published later today.
Analysts will scrutinise the data for evidence of demand conditions across all product sectors, including crude, heating oil and gasoline.
The latter of these has been particularly weak during the US summer driving season, driving crude prices lower.
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