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Oil prices firmer in Asian trade
AFP
SINGAPORE
Petroleumworld.com 01 26 06Oil prices were firmer in Asian trade Friday after sharp declines in US trade, with the market weighing the recent onset of very cold winter weather in the United States against ample US reserves, dealers said.
At 1:30 pm (0530 GMT), New York's main oil futures contract, light sweet crude for delivery in March, was up 28 cents at 54.51 dollars from 54.23 dollars in late US trade.
Brent North Sea crude for March was 37 cents higher at 54.49 dollars.
"The tone of the market has turned less bearish (negative) than a week ago due to the cold temperatures and US President George Bush's address about increasing the strategic petroleum storage," said Victor Shum, a senior principal at energy consultancy Purvin and Gertz in Singapore.
"In the past few days, sentiment is such that the market appears to have found a bottom around the 50-dollar mark."
Rising US energy stockpiles put a lid on prices following an increase due to the cold snap and Bush's announcement in his state of the union speech Tuesday the United States would double its strategic oil reserve.
US stocks of distillate products, such as heating oil and diesel fuel, increased 700,000 barrels to 142.6 million in the week ended January 19 while crude reserves rose 700,000 barrels to 322.2 million barrels, the latest US figures showed.
"The cold snap has provided a solid support level of above 50 dollars but it is not driving the market to surge ahead," Shum said. "In my view, it is not going to have a lasting impact as winter is coming to an end."
Oil prices have slumped since striking record peaks above 78 dollars in July, prompting the Organisation of the Petroleum Exporting Countries to twice announce output cuts.
"The market will watch over the next few weeks before the OPEC meeting in March to monitor if OPEC does (deliver) the overall 1.7 billion barrels per day cut," Shum said.The oil cartel has agreed to an output cut of 500,000 barrels per day set to start February 1 to follow a reduction of 1.2 million barrels in November.
AFP 26 0538 GMT 01 07
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