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Oil prices fall in Asian trade after sharp US gains
AFP
SINGAPORE
Petroleumworld.com 01 31 06
Oil prices fell in Asian trade Wednesday on profit-taking after a nearly three-dollar jump overnight as the market reacted to the US cold snap and revisited February's planned cut in OPEC output, dealers said.
The reverse also reflected position adjustment ahead of the key weekly US energy report due later in the day.
At 4:00 pm (0800 GMT), New York's main oil futures contract, light sweet crude for delivery in March, fell 31 cents to 56.66 dollars a barrel after adding 2.96 dollars to 56.97 dollars in late US trades.
Brent North Sea crude for March delivery slipped 28 cents to 56.10 dollars.
Victor Shum, senior principal at energy consultancy Purvin and Gertz in Singapore, said investors were in a mood to take profits after the strong price rise in the United States.
"What you see are investors pulling back. They are taking the opportunity to make a profit," Shum said.
Tuesday's rally was driven by fund managers "betting the market is set for a sustained surge in the near-term because of the cold weather and pending OPEC production cuts," he added.
Shum said he still expects oil prices to stay below 57 dollars.
"I expect 57 dollars to be a very strong resistance level. I would be surprised if prices surged beyond 57 dollars," he said.
Oil rocketed almost three dollars Tuesday on signs that oil kingpin Saudi Arabia is gearing up to cut its output in line with a scheduled OPEC reduction.
The Wall Street Journal, citing an unnamed senior Saudi official, reported that Saudi
Arabia would reduce its oil production by another 158,000 barrels per day from Thursday, with more cuts on the way.
Saudi Arabia is the leading member of the Organization of the Petroleum Exporting Countries (OPEC), which cut output in November and plans to do so again in February.
Earlier this month, Saudi Arabia had quashed talk of another emergency OPEC meeting to stage a third cut in the cartel's production but appears to be now shifting its intentions.
AFP 31 0802 GMT 01 07
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