Oil prices up in Asian trade
Tuesday, 24 March 2009
SINGAPORE, Mar 23 (AFP): Oil prices rose in Asian trade today, driven by optimism in the financial markets ahead of an expected US government announcement of a plan to sell toxic assets, analysts said.
New York's main futures contract, light sweet crude for delivery in May, was up 30 cents to 52.37 dollars a barrel. The Nymex contract for April delivery expired Friday.
Brent North Sea crude for May delivery gained 45 cents to 51.67 dollars.
"Right now, the crude oil market is primarily driven by the financial markets," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"What we are seeing in the crude oil market is a financial rally."
The US government is expected to to unveil the plan as early as Monday to sell toxic assets weighing down the financial system.
US Treasury Secretary Timothy Geithner would detail the "Public Private Investment Programme" to entice hedge funds and other private investors into investing in bad assets choking banks' balance sheets, US officials said.
Christina Romer, who chairs President Barack Obama's Council of Economic Advisers, said the administration would sink "in the order of 100 billion dollars" into the latest initiative to kick- start lending by shaky banks.
A financial storm that started in the United States last year has affected global economies, weakening demand for oil and led to a drastic fall in prices from historic peaks of more than 147 dollars in July.
Shum said another factor supporting oil prices was the weakening US dollar amid concerns over the ballooning US budget deficit and fears that the Federal Reserve had to print a lot of money to mop up bonds.
A weaker greenback tends to boost oil prices because it makes dollar-priced crude cheaper for buyers using stronger currencies.
The US central bank said Wednesday that it would buy up to 300 billion dollars in long-term US Treasury bonds over the next six months "to help improve conditions in private credit markets."
New York's main futures contract, light sweet crude for delivery in May, was up 30 cents to 52.37 dollars a barrel. The Nymex contract for April delivery expired Friday.
Brent North Sea crude for May delivery gained 45 cents to 51.67 dollars.
"Right now, the crude oil market is primarily driven by the financial markets," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"What we are seeing in the crude oil market is a financial rally."
The US government is expected to to unveil the plan as early as Monday to sell toxic assets weighing down the financial system.
US Treasury Secretary Timothy Geithner would detail the "Public Private Investment Programme" to entice hedge funds and other private investors into investing in bad assets choking banks' balance sheets, US officials said.
Christina Romer, who chairs President Barack Obama's Council of Economic Advisers, said the administration would sink "in the order of 100 billion dollars" into the latest initiative to kick- start lending by shaky banks.
A financial storm that started in the United States last year has affected global economies, weakening demand for oil and led to a drastic fall in prices from historic peaks of more than 147 dollars in July.
Shum said another factor supporting oil prices was the weakening US dollar amid concerns over the ballooning US budget deficit and fears that the Federal Reserve had to print a lot of money to mop up bonds.
A weaker greenback tends to boost oil prices because it makes dollar-priced crude cheaper for buyers using stronger currencies.
The US central bank said Wednesday that it would buy up to 300 billion dollars in long-term US Treasury bonds over the next six months "to help improve conditions in private credit markets."