Oil prices gain in Asia on technical rebound
Thursday, 4 October 2007
SINGAPORE, Oct 3 (AFP): World oil prices gained in Asian trade today in a technical rebound before the latest report on United States energy stockpiles, dealers said.
New York's main futures contract, light sweet crude for delivery in November, was 22 cents higher at 80.27 dollars per barrel in late morning trade.
The contract had eased slightly in New York to 80.05 dollars a barrel in late trades Tuesday.
Brent North Sea crude for November delivery eased a penny to 77.37 dollars a barrel.
Dariusz Kowalczyk, senior investment strategist at CFC Seymour in Hong Kong, said the New York contract was undergoing a technical rebound before an expected fall below the 80-dollar level later Wednesday.
Kowalczyk said the market would be closely watching the movement of the US dollar as well as the weekly US energy inventories report due out later Wednesday.
Analysts' consensus forecast was for a decline of 550,000 barrels in crude stocks but Kowalczyk disagreed. He said he expected "another big decline" in refinery capacity utilisation which should lead to a rise in crude inventories and a lowering of prices.
Gains in the dollar would also be a negative factor for crude, he said, as a stronger US unit makes dollar-denominated commodities, like crude oil, more expensive.
The euro was at 1.4172 against the dollar in morning trade, down from the record high of 1.4283 dollars Monday.
After soaring to record highs in late September, when the New York contract hit 84.10 dollars and Brent reached 81.05 dollars, oil prices have lost nearly four dollars.
Analysts were divided on whether the pullback is a blip or the start of a broader correction.
Michael Fitzpatrick of MF Global warned earlier that the bear run may prove short-lived because "there are still enough bullish factors in place to once again attract fresh buyers, especially bargain hunters as last week's lows are approached.
"Alternatively, if that level is easily breached, it will suggest that an even more extensive selloff might be under way," Fitzpatrick said.
But Kowalczyk said factors including slower US growth should lead to lower prices.
"In general for the fourth quarter I think oil will be declining," he said.
New York's main futures contract, light sweet crude for delivery in November, was 22 cents higher at 80.27 dollars per barrel in late morning trade.
The contract had eased slightly in New York to 80.05 dollars a barrel in late trades Tuesday.
Brent North Sea crude for November delivery eased a penny to 77.37 dollars a barrel.
Dariusz Kowalczyk, senior investment strategist at CFC Seymour in Hong Kong, said the New York contract was undergoing a technical rebound before an expected fall below the 80-dollar level later Wednesday.
Kowalczyk said the market would be closely watching the movement of the US dollar as well as the weekly US energy inventories report due out later Wednesday.
Analysts' consensus forecast was for a decline of 550,000 barrels in crude stocks but Kowalczyk disagreed. He said he expected "another big decline" in refinery capacity utilisation which should lead to a rise in crude inventories and a lowering of prices.
Gains in the dollar would also be a negative factor for crude, he said, as a stronger US unit makes dollar-denominated commodities, like crude oil, more expensive.
The euro was at 1.4172 against the dollar in morning trade, down from the record high of 1.4283 dollars Monday.
After soaring to record highs in late September, when the New York contract hit 84.10 dollars and Brent reached 81.05 dollars, oil prices have lost nearly four dollars.
Analysts were divided on whether the pullback is a blip or the start of a broader correction.
Michael Fitzpatrick of MF Global warned earlier that the bear run may prove short-lived because "there are still enough bullish factors in place to once again attract fresh buyers, especially bargain hunters as last week's lows are approached.
"Alternatively, if that level is easily breached, it will suggest that an even more extensive selloff might be under way," Fitzpatrick said.
But Kowalczyk said factors including slower US growth should lead to lower prices.
"In general for the fourth quarter I think oil will be declining," he said.