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Oil prices easier in Asia but within sight of fresh highs
SINGAPORE
Petroleumworld.com 10 15 07
World oil prices eased in Asian trade on Monday, but stayed within sight of fresh record highs as US economic data signalled solid demand for crude in a tight market, dealers said.
New York's main oil futures contract, light sweet crude for delivery in November, was 12 cents lower at 83.57 dollars a barrel in morning trade.
The contract reached a fresh high of 83.69 dollars a barrel in New York trades on Friday -- after almost touching the intra-day high of 84.10 dollars reached in September -- as tensions rose between Turkey and Kurdish rebels in Iraq.
Brent North Sea crude for November delivery was 34 cents lower at 80.21 dollars a barrel
Last month the Brent contract hit an all-time record high of 81.05 dollars.
Dariusz Kowalczyk, senior investment strategist with CFC Seymour in Hong Kong, said 84 dollars had provided strong psychological resistance that prevented the New York price from rising further.
Countering that, he said, was US retail sales data which rose a strong 0.6 percent last month.
"So on balance I think there is still some risk for upside, given that the market does seem to be tight, and the recent data on growth outlook were good," Kowalczyk said.
A government report released Friday showed United States consumers ramped up spending on electronics, automobiles and other goods.
Excluding vehicle sales, the Commerce Department said retail sales rose an improved 0.4 percent in September, in defiance of most economists' expectations.
Economists have been keeping a nervous watch on retail activity amid fears consumers would cut back their spending because of a US housing slump and a related credit squeeze which forced many banks to tighten their lending practices.
Kowalczyk said the upside to oil prices would be limited and they should end the week lower as the Atlantic Ocean hurricane season -- a potential threat to oil installations -- draws to a close, US inventories are expected to build, and the The Organisation of the Petroleum Exporting Countries (OPEC) expects to increase output.
The cartel recently decided to increase its crude output by 500,000 barrels, from November 1.
Kowalczyk said the market has already priced in the impact of rising tensions between Turkey and Iraq's autonomous Kurdish region.
Turkish troops on Sunday sent shells crashing across the Iraqi border into several villages in the region, officials said, as Ankara prepared to ask legislators to approve a ground incursion.
Story by AFP 15 0348 GMT 10 07
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