Oil recouped some of last week’s slump in lower-volume trading as many investors took a pause while awaiting further clues to demand. 

West Texas Intermediate rose to trade near US$79 a barrel, swinging in a US$2.50 range during a volatile session throughout the day. Last week, the commodity experienced the biggest weekly drop since the banking crisis in March amid signs of shrinking refining margins in Asia. 

“There are a lot of traders sitting on the sidelines trying to figure out a direction,” said Carley Garner a Commodity Broker and Strategist at DeCarley Trading. “Traders are looking for a dip to get into; if we hold US$75, we can start making a way higher.”

Crude has wiped out nearly all of the rally seen earlier this month after the Organization of Petroleum Exporting Countries and its allies announced surprise new production cuts. Citigroup Inc. said it was taken aback by the magnitude of the pullback in Asian refining margins, which is partly attributable to the ramp up of new Middle Eastern refineries.

Prices:

• WTI for June delivery rose 89 cents to settle at US$78.76 a barrel at 3:13pm in New York
• Brent for June settlement rose US$1.07 to US$82.73 a barrel.

Later this week, the Federal Reserve will release the last of its major reports on U.S. jobs, inflation and consumer spending before its May policy meeting. Additionally, some of the world’s biggest oil majors, including Chevron and Exxon, will report their first-quarter earnings on Friday.