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06 December 2023

World oil prices higher in Asian trade

By Agencies


World oil prices were higher in volatile Asian trade Monday, with worries over a looming US recession weighing down on market sentiment, dealers said.

In morning trade, New York's main oil futures contract, light sweet crude for delivery in March, rose nine cents to $95.59 dollars per barrel.

The contract closed up five cents at $95.50 a barrel during floor trading on Friday at the New York Mercantile Exchange.

Brent North Sea crude for April delivery increased seven cents to $94.70 a barrel.

"Prices are fluctuating around closing levels from Friday as investors look for new directions from any US data this week," said Dariusz Kowalczyk, senior investment strategist at CFC Seymour securities in Hong Kong.

Prices are also getting support from supply concerns after oil-producing Venezuela cut off supplies to US energy giant ExxonMobil, as well as unrest in Africa's biggest crude exporter Nigeria, analysts said.

Venezuela's state petroleum company PDVSA last week suspended oil supplies to ExxonMobil after the US firm unleashed a legal campaign to freeze billions of dollars in global PDVSA assets.

The move came after ExxonMobil, the world's biggest energy company, secured international court orders freezing up to $12 billion in PDVSA assets.

ExxonMobil is seeking compensation after Venezuela nationalized oil assets in the Orinoco basin, including former ExxonMobil operations.
In Nigeria, unrest rekindled market worries over production from
Africa's largest crude oil producer. Instability and violence have resulted in Nigeria's oil output being slashed by a quarter in 2007.

Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore, supply worries "may not drive the market on" as dealers turn their attention to US economic data.

US energy consumption patterns are closely watched because it is the world's biggest economy and its largest energy consumer. A US recession is likely to induce a global economic slowdown.

"The market will probably wait for the housing report later this week to see how negative an impact it will have on the US economy," Kowalczyk said of the US economy, which has been battered by a housing slump due to massive defaults in risky loans.

The International Energy Agency said last week that the world oil market could be set for a lengthy slowdown after prices struck a record high $100.09 at the start of January.

In Vienna on Friday, the Opec oil cartel lowered its projections for growth of oil demand this year in response to a slowdown in world economic momentum. (AFP)