Oil steady at $58, underpinned by stock rally
Oil prices were steady around $58 a barrel in Asia after rising overnight as traders took their cue from a jump in global stock markets.
By Agencies |
SINGAPORE: Oil prices were steady around $58 a barrel Friday in Asia after rising overnight as traders took their cue from a jump in global stock markets.
Light, sweet crude for December delivery was down 24 cents to $58.00 a barrel, after rising as high as $59.96 in electronic trading on the New York Mercantile Exchange by mid afternoon in Singapore. The crude futures contract overnight rose $2.08 to settle at $58.24 after dipping to $54.67, a price last seen in January 2007.
``Oil is just following the equity market,'' said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. ``If the stock market improves, oil will go up on perceived improved demand.''
Most Asian stock markets rose Friday after posting steep losses earlier in the week.
Japan's benchmark Nikkei 225 index rose 2.7 perc ent, Hong Kong's Hang Seng index was up 2.6 per cent, and Australia's benchmark gained 1.4 per cent.
Asian markets got a boost from a big rally in U.S. stocks. The Dow Jones industrial average surged 6.7 per cent Thursday, and the Standard & Poor's 500 index jumped 6.9 per cent. U.S. stocks gained back $700 billion in market capitalization Thursday, after losing about $1 trillion during the first three days of the week.
``The volatility is truly amazing,'' Rigby said. ``It highlights the confusion and uncertainty we're in.''
Oil prices have fallen about 60 per cent during the last four months after reaching $147.27 in July.
The Organization of Petroleum Exporting Countries, which produces about 40 per cent of world supplies, has said it may cut production by the end of this month if prices continue to fall. The group's next official meeting is on Dec. 17.
OPEC cut output quotas by 1.5 million barrels last month on top of an earlier 520,000 barrel reduction, moves the market has largely brushed off.
``I can't see the price going below $50,'' Rigby said. ``I think OPEC would do something. Another OPEC cut would get the market's attention.''
Evidence of higher-than-expected U.S. oil demand also helped bolster prices. Oil inventories were unchanged last week at 311.9 million barrels, which is 2 per cent above year earlier levels, the Energy Department's Energy Information Administration said Thursday in its weekly report.
Analysts had expected inventories to rise 1.1 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. It was the second consecutive week in which inventories were flat.
In other Nymex trading, heating oil futures fell 0.75 cents to $1.89 a gallon, while gasoline prices dropped 1.46 cents to $1.27 a gallon. Natural gas for December delivery was up 4.7 cents at $6.37 per 1,000 cubic feet.
In London, December Brent crude rose $3.79 to $55.78 a barrel on the ICE Futures exchange.
Light, sweet crude for December delivery was down 24 cents to $58.00 a barrel, after rising as high as $59.96 in electronic trading on the New York Mercantile Exchange by mid afternoon in Singapore. The crude futures contract overnight rose $2.08 to settle at $58.24 after dipping to $54.67, a price last seen in January 2007.
``Oil is just following the equity market,'' said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. ``If the stock market improves, oil will go up on perceived improved demand.''
Most Asian stock markets rose Friday after posting steep losses earlier in the week.
Japan's benchmark Nikkei 225 index rose 2.7 perc ent, Hong Kong's Hang Seng index was up 2.6 per cent, and Australia's benchmark gained 1.4 per cent.
Asian markets got a boost from a big rally in U.S. stocks. The Dow Jones industrial average surged 6.7 per cent Thursday, and the Standard & Poor's 500 index jumped 6.9 per cent. U.S. stocks gained back $700 billion in market capitalization Thursday, after losing about $1 trillion during the first three days of the week.
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``The volatility is truly amazing,'' Rigby said. ``It highlights the confusion and uncertainty we're in.''
Oil prices have fallen about 60 per cent during the last four months after reaching $147.27 in July.
The Organization of Petroleum Exporting Countries, which produces about 40 per cent of world supplies, has said it may cut production by the end of this month if prices continue to fall. The group's next official meeting is on Dec. 17.
OPEC cut output quotas by 1.5 million barrels last month on top of an earlier 520,000 barrel reduction, moves the market has largely brushed off.
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``I can't see the price going below $50,'' Rigby said. ``I think OPEC would do something. Another OPEC cut would get the market's attention.''
Evidence of higher-than-expected U.S. oil demand also helped bolster prices. Oil inventories were unchanged last week at 311.9 million barrels, which is 2 per cent above year earlier levels, the Energy Department's Energy Information Administration said Thursday in its weekly report.
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Analysts had expected inventories to rise 1.1 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. It was the second consecutive week in which inventories were flat.
In other Nymex trading, heating oil futures fell 0.75 cents to $1.89 a gallon, while gasoline prices dropped 1.46 cents to $1.27 a gallon. Natural gas for December delivery was up 4.7 cents at $6.37 per 1,000 cubic feet.
In London, December Brent crude rose $3.79 to $55.78 a barrel on the ICE Futures exchange.
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