Oil prices higher in Asian trade
By Agencies |
Highlights
SINGAPORE: Oil prices were higher in Asian trade on Monday as temperatures fell in the United States, boosting demand for heating oil, dealers said.
At 10:40 am (0240 GMT), New York's main contract, light sweet crude for February delivery was 39 cents higher at 52.38 US dollars a barrel from $51.99 in late US deals on Friday.
Brent North Sea crude for March was 19 cents higher at $53.63. "I think it's a little bit due to the cold weather in the US and it's really a part of the volatilty of trading," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
Shum however said the spike in prices may be short-lived as the colder weather may have come "a bit too late" at a time when the United States, the world's largest energy user, has ample stocks of heating oil. Crude prices tumbled to a 19-month low under $50 in New York on Thursday after the US Department of Energy's weekly report showed increases in oil stocks.
The DoE said crude oil reserves rose 6.8 million barrels to 321.5 million in the week ended January 12 while levels of distillate products, such as heating oil and diesel fuel, increased 900,000 barrels to 141.9 million over the week. "There are not too many cold winter days left," said Shum.
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"In the last few trading sessions, most market participants ignored any bits of bullish news and the cold weather in the US came a bit too late." Crude prices have dipped sharply since the start of 2007, mainly owing to mild winter temperatures across the United States and are 33 percent lower than their all time peak of above $78 reached in July 2006. Meanwhile, the Organization of the Petroleum Exporting Countries on Friday revised downward its estimate for growth in world oil demand this year to 1.5 per cent from 1.6 per cent. "The warm weather has ... dampened oil demand in 2007 with lower consumption expected for heating oil and fuel oil," OPEC said in a monthly report.
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