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Oil prices higher in Asian trade

Thursday, January 24, 2008

SINGAPORE (Thomson Financial) - World oil prices continued higher in Asian trade Friday as global stock markets firmed but underlying worries about the US economy remained.

In late morning trade, New York's main contract, light sweet crude for delivery in March, rose 44 cents to 89.85 dollars per barrel.

The contract jumped 2.42 dollars to close at 89.41 dollars per barrel Thursday during floor trading on the New York Mercantile Exchange.

Brent North Sea Crude for March delivery was 34 cents higher at 89.41 dollars a barrel, after shooting up 2.45 dollars to 89.07 dollars in London on Thursday.

Key regional bourses continued their rebound Friday after a quick agreement by US leaders on a stimulus package for the US economy.

"Everybody is still concerned about the US economy. Yes there has been a rebound but I think the factors that underlie the stock market are still bearish," said Tony Nunan, of Mitsubishi Corp's international petroleum business in Tokyo.

"The commodities market will continue to look for signs for health of the US economy from equities and that will affect prices," he said.

Despite recent gains, oil prices are still well off their early January records of 100.09 dollars per barrel in New York and 98.50 dollars in London.

Traders said rapid economic growth in China -- the world's second-largest importer of crude -- helped to support crude prices on Thursday.

China's economy grew at 11.4 percent in 2007, reaching the highest level in 13 years and marking the fifth straight year of double-digit growth, the government said Thursday.

"Oil will get support from stocks if they stay strong but may also get some support from China's GDP," Phil Flynn at Alaron Trading said earlier.

But Nunan said the focus remains on the United States economy.

"If the US economy goes down, the demand from China will go down as well," he said.

On Thursday, the US Department of Energy announced that US crude inventories had risen by 2.3 million barrels in the week to January 18.

Analysts had forecast a gain of 1.5 million.

The data was published one day later than usual because of a US public holiday Monday.

Posted by MOHAMED SAID at 10:52 PM  

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