Oil stays below $50 in Asia
Wednesday, 1 April 2009
KUALA LUMPUR, Mar 31 (AP): Oil prices edged up Tuesday in Asia but remained below $50 a barrel as fears of a major automaker bankruptcy in the U.S. sparked renewed jitters over the global economy.
Benchmark crude for May delivery rose 71 cents to $49.12 by midday in Asian electronic trading on the New York Mercantile Exchange. The contract fell more than 7.6 per cent, or $3.97, to settle at $48.41 on Monday.
Traders said the White House's move on Monday to refuse further long-term federal bailouts for General Motors Corp. and Chrysler cast a cloud over the struggling auto industry and raised concerns for the overall economy.
"A possible bankruptcy threatening GM and Chrysler caused the stock market to tumble and worries about the economy have returned to the forefront," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore.
It will be tough for crude prices to return to the $50 a barrel mark as market fundamentals remain weak, he said. Most energy market analysts found no fundamental reason for a rally this month that pushed oil prices from $40 per barrel to more than $50. Crude inventories continue to build even with OPEC cutting production and domestic producers suspending oil projects. Jim Ritterbusch, president of energy consulting group Ritterbusch and Associates, said he expects oil to fall as low as $47 in advance of a U.S. crude inventory report.
Benchmark crude for May delivery rose 71 cents to $49.12 by midday in Asian electronic trading on the New York Mercantile Exchange. The contract fell more than 7.6 per cent, or $3.97, to settle at $48.41 on Monday.
Traders said the White House's move on Monday to refuse further long-term federal bailouts for General Motors Corp. and Chrysler cast a cloud over the struggling auto industry and raised concerns for the overall economy.
"A possible bankruptcy threatening GM and Chrysler caused the stock market to tumble and worries about the economy have returned to the forefront," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore.
It will be tough for crude prices to return to the $50 a barrel mark as market fundamentals remain weak, he said. Most energy market analysts found no fundamental reason for a rally this month that pushed oil prices from $40 per barrel to more than $50. Crude inventories continue to build even with OPEC cutting production and domestic producers suspending oil projects. Jim Ritterbusch, president of energy consulting group Ritterbusch and Associates, said he expects oil to fall as low as $47 in advance of a U.S. crude inventory report.