Oil dips in Asian trade, stays around 86 dollars | business | Hindustan Times
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Oil dips in Asian trade, stays around 86 dollars

business Updated: Apr 06, 2010 10:49 IST

Oil prices dipped in Asian trade on Tuesday after surging near 87 dollars on demand optimism, analysts said.

New York's main contract light sweet crude for May delivery eased 20 cents to 86.42 dollars a barrel.Brent North Sea crude for May was down to 27 cents to 85.61 dollars.

"Oil prices have softened a little bit but it's still at extremely high levels," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

"Fundamentally, we still have very strong price gains over the last couple of days and we are seeing the market take a breather after a very strong run higher."

Oil prices surged on Monday on a swathe of positive economic data that pointed to a building US economic recovery from the worst recession in a generation.

Stronger-than-expected housing and service-sector data followed improving employment figures published on Friday, pushing up expectations of higher energy demand.

The US Labor Department on Friday said, 162,000 jobs were created in March, the highest figure in three years.

On Monday the Institute of Supply Management said, its non-manufacturing index rose to 55.4 percent in March, its third consecutive month of growth. Most analysts had expected the so-called purchasing managers index would register 54 percent.

There was also good news on the troubled US housing sector, the epicentre of the financial crisis that drove the global economy into the worst recession in decades.

Pending home sales surged 8.2 percent in February, the National Association of Realtors said.

Monday's rally followed gains made last week as investors bet on better demand prospects amid signs of a strengthening economic recovery, analysts said.