Wednesday May 14, 06:49 AM
Oil prices turn slightly higher in Asian trade
SINGAPORE (Thomson - Crude oil prices turned slightly higher in early afternoon Asian trade on Wednesday despite a forecast for slower energy demand growth.
New York's main oil futures contract, light sweet crude for June delivery,
rose 15 cents to $125.95 per barrel.
On Tuesday at the New York Mercantile Exchange, the benchmark contract jumped to a record $126.98 before settling at $125.80. The contract had risen $1.57 at the close.
Brent North Sea crude for June delivery gained 16 cents to $124.26 a barrel, after closing at $124.10 on Tuesday in London.
Crude oil prices have more than doubled in the past year and rocketed about 25 percent since the start of 2008, when they broke the $100 barrier.
'The oil market has been holding steady since it rose yesterday... on concerns about distillate tightness in the market,' said Victor Shum, an analyst at Purvin and Gertz energy consultancy in Singapore.
The latest price spike followed a fall earlier Tuesday after the International Energy Agency (IEA), energy policy adviser to major industrialised countries, cut its forecast for growth in global oil demand.
'What we've seen in this market since August is that any dip is eventually met by a short-covering rally that pushes prices to new highs,' said AG Edwards analyst Eric Wittenauer.
'It is not a surprise to see prices struggle to show any kind of downward trend.'
Shum said the market remains bullish, despite the IEA report, and turned its focus to the weekly report on U.S. energy stockpiles due from the United States Department of Energy later Wednesday.
'The figures on crude and product inventory results will provide some direction,' Shum said.
Paris-based IEA forecast in a monthly report that crude oil demand in 2008 would stand at 86.8 million barrels per day (bpd), 1.2 percent more than last year but about 390,000 bpd less than a previous estimate given in April.
The energy monitoring agency also said it now estimated world oil demand in 2007 at 85.8 million bpd, an increase of 1.1 million bpd or 1.3 percent on the 2006 figure but 150,000 barrels less than the April estimate.
Along with an inflow of investor funds, analysts have cited a variety of factors for this year's price spikes, including rising energy demand from Asian powerhouse economies China and India, and OPEC's refusal to pump more crude.
But analysts said the market was also looking overbought as threatened disruptions to Middle East supply have failed to materialise and as militant threats against oil company operations in Nigeria have been priced in to current values.
A group of Democratic Party Senators in the United States on Tuesday threatened to block a multi-million dollar U.S. arms deal with Saudi Arabia unless the kingdom increases oil production and helps cut soaring gasoline prices.
The senators introduced a resolution of disapproval on the arms sale.
U.S. President George W. Bush will raise the issue of high oil prices and their negative economic impact when he visits Saudi Arabia on Friday, White House spokeswoman Dana Perino said.
Saudi Arabia is the biggest producer in the Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world's oil.
afp
-
zr/nt
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
NNNN
|
Send Article by Email
