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Oil prices shadow 100 dollars in Asian trade
SINGAPORE
Petroleumworld com, Feb 28, 2008World oil prices hovered around 100 dollars Thursday, facing downward pressure from fresh concerns over a slowing US economy and rising US crude stockpiles, analysts said.
In afternoon trade, New York's main contract, light sweet crude for delivery in April, fell 14 cents to 99.50 dollars a barrel.
On Wednesday the contract had touched an all-time high of 102.08 dollars per barrel in pre-market electronic trade but closed 1.24 dollars lower at 99.64 dollars a barrel at the New York Mercantile Exchange.
Brent North Sea crude for April eased nine cents to 98.18 dollars a barrel.
In London on Wednesday the contract reached a record peak of 100.53 dollars before closing down 1.20 dollars at 98.27 dollars.
David Johnson, an analyst with Macquarie Research in Hong Kong, said the stronger euro had given some support to prices.
The dollar's weakness boosts prices of dollar-denominated raw materials such as oil because they become cheaper for buyers using stronger currencies, which tends to encourage demand, traders said.
"And more investors are jumping into commodities, especially oil and gold, as a safe haven," said Johnson.
The dollar fell Wednesday to a new all-time low against the European single currency -- at 1.5144 dollars -- following more negative data on the faltering US economy.
"The sharp break in the dollar appears to be sparking another round of broad based speculative commodity fund buying, including energies, as a hedge against ensuing inflation," Mike Fitzpatrick at MF Global said earlier.
But analysts said the latest weekly report on energy stockpiles by the US Department of Energy (DoE) provided a counter to rising prices.
DoE said US crude reserves rose by 3.2 million barrels in the week ended February 22. That beat market expectations for a gain of 2.7 million.
US gasoline stocks increased by 2.3 million barrels.
Johnson said Wednesday's speech by US Federal Reserve chairman Ben Bernanke will also add downward pressure to prices because it renews worries on "slowing demand".
Bernanke told Congress that weak US economic growth may prompt the central bank to cut interest rates further to ward off a severe downturn.
This week's record-breaking oil rally has sparked speculation that the powerful OPEC oil exporters' cartel -- which pumps 40 percent of world oil -- could maintain production at current levels next week.
Ministers from the 13-nation Organisation of the Petroleum Exporting Countries meet in Vienna on March 5 for an output meeting.
With prices back in triple-figure territory, many oil industry experts expect that OPEC will hold its official daily output at 29.67 million oil barrels.
Story from AFP
AFP 28 0621 GMT 02 08Copyright© 2007 Petroleumworld. All rights reserved.
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