Oil prices rise after sharpest fall in 17 years
Thursday, 17 July 2008
SINGAPORE, July 16 (AFP): Oil prices rose in Asia today after fears for economic growth sent prices into their steepest fall in 17 years during New York trading, analysts said.
New York's main oil contract, light sweet crude for August delivery, was 22 cents higher at 138.96 dollars a barrel.
The contract sank 6.44 dollars to close at 138.74 dollars a barrel Tuesday at the New York Mercantile Exchange. It was the sharpest single-session decline since January 1991.
"I was stunned," said Dave Ernsberger, Asia director of global energy information provider Platts. "At one point crude futures fell by 10 dollars in one hour."
Brent North Sea crude for August delivery was 33 cents higher at 139.08 dollars a barrel following a plunge of 5.17 dollars to settle at 138.75 dollars Tuesday in London.
Analysts said the falls coincided with United States (US) Federal Reserve chairman Ben Bernanke's semiannual forecast to Congress, in which he said there was a 'high degree of uncertainty' about the US economic outlook.
Traders fear that a slowing economy in the US, the world's biggest oil consumer, will hurt demand for crude.
Al Goldman at Wachovia Securities blamed the huge price fall on Bernanke's 'gloomy assessment' as well as a cut in the demand forecast by Organisation of the Petroleum Exporting Countries (OPEC).
The OPEC Tuesday revised down its forecast for growth of world oil
demand this year to 1.20 per cent from 1.28 per cent, citing an economic slowdown and high fuel prices.
After the heavy falls Tuesday, the oil market was looking ahead to a weekly government report on US energy stockpiles which was to be released later Wednesday.
A Platts survey of analysts suggests a fall in US crude stocks of three million barrels and a drop of more than 1.1 million barrels for gasoline.
Oil prices had soared after breeaking through 100 dollars at the start of 2008, and hit peaks above 147 dollars last Friday.
The record prices sparked protests around the world, and fears for economic growth.
New York's main oil contract, light sweet crude for August delivery, was 22 cents higher at 138.96 dollars a barrel.
The contract sank 6.44 dollars to close at 138.74 dollars a barrel Tuesday at the New York Mercantile Exchange. It was the sharpest single-session decline since January 1991.
"I was stunned," said Dave Ernsberger, Asia director of global energy information provider Platts. "At one point crude futures fell by 10 dollars in one hour."
Brent North Sea crude for August delivery was 33 cents higher at 139.08 dollars a barrel following a plunge of 5.17 dollars to settle at 138.75 dollars Tuesday in London.
Analysts said the falls coincided with United States (US) Federal Reserve chairman Ben Bernanke's semiannual forecast to Congress, in which he said there was a 'high degree of uncertainty' about the US economic outlook.
Traders fear that a slowing economy in the US, the world's biggest oil consumer, will hurt demand for crude.
Al Goldman at Wachovia Securities blamed the huge price fall on Bernanke's 'gloomy assessment' as well as a cut in the demand forecast by Organisation of the Petroleum Exporting Countries (OPEC).
The OPEC Tuesday revised down its forecast for growth of world oil
demand this year to 1.20 per cent from 1.28 per cent, citing an economic slowdown and high fuel prices.
After the heavy falls Tuesday, the oil market was looking ahead to a weekly government report on US energy stockpiles which was to be released later Wednesday.
A Platts survey of analysts suggests a fall in US crude stocks of three million barrels and a drop of more than 1.1 million barrels for gasoline.
Oil prices had soared after breeaking through 100 dollars at the start of 2008, and hit peaks above 147 dollars last Friday.
The record prices sparked protests around the world, and fears for economic growth.