Oil prices mixed in Asian trade
World oil prices were mixed in Asian trade Tuesday in a market plagued by weak global demand, analysts said.business Updated: Jan 20, 2009 22:20 IST
World oil prices were mixed in Asian trade Tuesday in a market plagued by weak global demand, analysts said.
New York's main contract, light sweet crude for February delivery, plunged 2.12 dollars to 34.39 dollars a barrel.
Floor trading on the New York Mercantile Exchange (Nymex) was closed Monday for a holiday.
Brent North Sea crude for March delivery rose 30 cents to 44.80.
A large stockpile of oil in the United States has caused the New York contract to "become disconnected" from the rest of the market, said Victor Shum of Purvin and Gertz international energy consultants in Singapore.
"The Nymex has been under a lot of pressure because stockpiles in Cushing, Oklahoma are very high. Storage is almost full," he said. Cushing is the delivery point for light, sweet crude.
Shum added that the higher March Brent price was more representative but said the weak global economy was having a negative impact.
"The global economy is now the main driver of oil... The macroeconomic outlook is bleak, with no signs of a turnaround in the global economy," he said.
Support for oil prices has been eliminated by the successful resolution on Monday of a Russia-Ukraine gas dispute and Israel's weekend ceasefire with Hamas in the Gaza Strip, the analyst said.
Incoming US president Barack Obama, to be inaugurated later Tuesday, might have a positive but short-term effect, Shum added.
"I think any Obama bounce may be short-lived. Equity markets may react positively for a day or two", he said.