Oil nears US$105 in Asian trade
SINGAPORE: Oil edged closer to US$105 (K306.57) a barrel in Asian trade yesterday, touching another new record high after an unexpected drop in US stockpiles and Opec’s rejection of calls to increase output.
Dealers said the continued weakness of the dollar was also helping drive crude prices, which have hit a string of records and led US president George W. Bush to urge the Opec cartel to boost production.
New York’s main contract, light sweet crude for April delivery, traded briefly at a new high of US$104.95 (K306.42) before easing to US$104.30 (K304.53) in afternoon trading. It closed Wednesday at US$104.52 (K305.17).
London’s Brent North Sea crude for April delivery eased US$0.22 to US$101.42 (K296.12) a barrel from its record close of US$101.64 (K296.76) on Wednesday.
In announcing it would maintain daily production at the current level of 29.67 million barrels, Opec said on Wednesday that the market was “well-supplied” – a sentiment not fully shared by traders.
“The truth of the matter is there is not a lot of supply in the supply chain,” Justin Wilks, director of trading and operations at Global Commodities fund group in Australia, said.
With prices over US$100 (K291.97), Wilks said: “I would suggest that we would have to get used to it.”
Prices shot higher in US trading hours on Wednesday after the US department of energy said crude inventories tumbled by 3.1 million barrels last week.
That confounded market expectations of a rise of 2.4 million barrels and was the first weekly drop for a month and a half. – AFP
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