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Oil prices up, ending longest losing streak in years

Rigs contracted by Apache Corp drill for crude oil locked tight in shale in west Texas' Permian Basin near the town of Mertzon, Texas in this October 29, 2013, file photo. REUTERS/Terry Wade/Files

NEW YORK, July 10 (Reuters) - Oil prices rose on Thursday, ending their longest losing streak in years as traders bet a weeks-long decline had run too far.

European Brent crude rebounded slightly after eight days of losses, the longest slide since 2010, and U.S. crude recovered from a nine-day losing streak, matching a slide in late 2009. Some traders who shorted the market earlier bought back contracts to secure their profits, dealers said.

After surging abruptly in early June, prices fell more than 5 percent over the past three weeks as easing geopolitical tensions in Iraq and Libya soothed worries over oil supplies.

"The rally of the previous weeks was all on anticipation that there was going to be supply disruptions, but the market is now starting to stabilize," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.

Brent crude gained 39 cents to settle at $108.67 a barrel. It hit a low of $107.76 earlier in the session, the weakest since May 9.

U.S. crude gained 64 cents to settle at $102.93 a barrel, after hitting an intraday low of $101.55, the weakest price since May 16.

While concerns over abrupt oil shortages from Iraq have eased since an Islamist insurgency raised the specter of disruptions, traders remain on edge. Sunni insurgents battling forces loyal to Iraqi Prime Minister Nuri al-Maliki broke into a military base northeast of Baghdad on Thursday.

In Libya, output has risen to 350,000 barrels per day because of an increase in production from the El Sharara field, where a protest ended earlier this month. Still, experts say it will take months to ramp up production and more unrest is possible.

Oil prices also gained some support from strong U.S. stocks, which pared losses after concerns about the financial stability of Portugal's top banks prompted investors to book profits.

"The stock market continues to be resilient. If the stocks can bounce back, then maybe oil prices can recover too," said Phil Flynn, an analyst at Price Futures Group in Chicago.


Fuel demand in the United States had also been a let-down, despite a gradual recovery in the world's largest economy, according to government data.

In China, the world's second-largest oil consumer, crude imports rose 10.2 percent in the first half of the year, customs data showed. Analysts attributed the jump to stockpiling.

Investors expect Beijing to implement more stimulus measures to support growth, which could lift its fuel demand.

OPEC expects its share of the world oil market to shrink in 2015 for the third year running, despite an increase in global demand. Its oil demand next year will average 29.37 million bpd, down 310,000 bpd from 2014, according to its monthly report.