Oil prices inch toward $75 in Asia amid concerns over weak recovery in oil demand
By Eileen Ng, APWednesday, January 27, 2010
Oil inches up in Asia ahead of US inventory report
KUALA LUMPUR, Malaysia — Oil prices inched toward $75 a barrel Wednesday in Asia but gains were limited amid concerns that energy demand isn’t recovering as quickly as expected.
Benchmark crude for March delivery was up 5 cents to $74.76 a barrel at midday Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract fell 55 cents to settle at $74.71 on Tuesday.
Trading was lackluster ahead of a weekly oil inventory report by the Energy Department’s Energy Information Administration that is expected to show demand remains weak despite another cold snap in the U.S.
Clarence Chu, a trader with Hudson Capital Energy in Singapore, said the American Petroleum Institute has forecast a 2.2 million barrel decline in oil inventories, compared with market expectations for an increase in supplies of 1.5 million barrels.
Cold and snow from before Christmas into the first part of January helped drive oil prices to a 15-month high earlier this month. Below-average temperatures were forecast again for much of the eastern half of the U.S., the world’s largest oil consumer, through at least the end of the week.
But oil prices have been clouded by falls in stock markets amid anxiety over President Barack Obama’s plan to regulate banks. China is also moving ahead with measures to curb bank lending, sparking concerns that a slowdown in China’s big economy could destabilize a worldwide recovery and dampen global appetite for oil.
In other Nymex trading in February contracts, heating oil added 0.17 cent to $1.9525 a gallon, while gasoline gained 0.37 cent to $1.9711 a gallon. February natural gas futures fell 0.17 cent to $5.468 per 1,000 cubic feet.
In London, Brent crude for March delivery fell 2 cents to $73.27 a barrel on the ICE Futures exchange.
