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Oil prices ease in Asia

Oil prices eased in Asian trade on Tuesday after optimism over a Chinese economic stimulus package wore off, analysts said.

business Updated: Nov 11, 2008 15:20 IST

Oil prices eased in Asian trade on Tuesday after optimism over a Chinese economic stimulus package wore off, analysts said.

New York's main contract, light sweet crude for December delivery, fell US$ 1.48 to US$ 60.93 a barrel from US$ 62.41 at the close of floor trading on Monday at the New York Mercantile Exchange.

Brent North Sea crude for December fell US$ 1.85 to US$ 57.23 after settling at US$ 59.08 on Monday in London.

The New York contract gained US$ 1.37 on Monday while Brent rose 1.73 with sentiment boosted by hopes that China's huge economic stimulus package would lift energy demand, analysts said.

But Mike Fitzpatrick, an analyst at MF Global, cautioned that the rally from the stimulus may be short-lived given the worldwide financial crisis.

"Once the shock of the surprise wears off, some of the gains will probably be given back," Fitzgerald said.

"This week we had the Chinese announcement about a stimulus package which is very large," said John Vautrain, a Singapore-based senior vice president with energy consultancy Purvin and Gertz.

"That bolstered the market on Monday... That enthusiasm is wearing thin," he said.

China on Sunday announced the US$ 586-billion package aimed at boosting its faltering economy while pessimism mounts over the impact of global financial turmoil on the country's export-dependent economy.