Wednesday July 15, 2009
SINGAPORE: Oil was higher in Asian trade Wednesday but any further sharp gains were likely to be capped by worries over weak US energy demand, analysts said.
New York's main contract, light sweet crude for August delivery, advanced 60 cents to 60.12 dollars a barrel after closing Tuesday 17 cents lower at 59.52 dollars, it’s lowest since May 18.
Brent North Sea crude for August delivery gained 74 cents to 61.60 dollars.
Keeping a lid on prices are expectations of another build-up in US oil stockpiles when the Department of Energy (DoE) releases its weekly inventory report later Wednesday, analysts said.
A Dow Jones Newswires poll of analysts expects the DoE report to show a 900,000-barrel rise in gasoline reserves in the week to July 10, indicating anaemic demand in the world's biggest economy and energy user.
"The world is facing a glut of oil," Morgan Stanley's commodity analysts said in a report.
Last week's DoE report also showed an increase in gasoline reserves, which are widely monitored at this time of year when the US summer holiday driving season kicks into gear.
Also likely to weigh on prices are comments by US President Barack Obama that he expects the unemployment rate, currently at 9.5 percent, to rise further.
"This has been a more severe recession than we've seen since the Great Depression," Obama said Tuesday, adding that the United States would "probably continue to see unemployment tick up for several months."
Uncertainty over the global economy, particularly the US, will weigh on commodity prices in the next few months, analysts from Barclays Capital said.
"While the long-term outlook for a broad range of commodities still appears positive, there is less certainty over the short-term," they said in a report.
"The commodity price rally is likely to prove very sensitive to any faltering in the economic recovery story."
(AFP)
SINGAPORE: Oil was higher in Asian trade Wednesday but any further sharp gains were likely to be capped by worries over weak US energy demand, analysts said.
New York's main contract, light sweet crude for August delivery, advanced 60 cents to 60.12 dollars a barrel after closing Tuesday 17 cents lower at 59.52 dollars, it’s lowest since May 18.
Brent North Sea crude for August delivery gained 74 cents to 61.60 dollars.
Keeping a lid on prices are expectations of another build-up in US oil stockpiles when the Department of Energy (DoE) releases its weekly inventory report later Wednesday, analysts said.
A Dow Jones Newswires poll of analysts expects the DoE report to show a 900,000-barrel rise in gasoline reserves in the week to July 10, indicating anaemic demand in the world's biggest economy and energy user.
"The world is facing a glut of oil," Morgan Stanley's commodity analysts said in a report.
Last week's DoE report also showed an increase in gasoline reserves, which are widely monitored at this time of year when the US summer holiday driving season kicks into gear.
Also likely to weigh on prices are comments by US President Barack Obama that he expects the unemployment rate, currently at 9.5 percent, to rise further.
"This has been a more severe recession than we've seen since the Great Depression," Obama said Tuesday, adding that the United States would "probably continue to see unemployment tick up for several months."
Uncertainty over the global economy, particularly the US, will weigh on commodity prices in the next few months, analysts from Barclays Capital said.
"While the long-term outlook for a broad range of commodities still appears positive, there is less certainty over the short-term," they said in a report.
"The commodity price rally is likely to prove very sensitive to any faltering in the economic recovery story."
(AFP)
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