Oil stays above US$81 per barrel

Business, Normal

SINGAPORE: Oil prices edged up in Asian trade yesterday, supported by higher consumption of heating fuel due to a cold snap in the northern hemisphere, analysts said.
Data showing that the US manufacturing sector posted its strongest pace of activity since April 2006 also bolstered prices, with analysts saying that a firmer recovery in the world’s biggest economy is good for energy demand.
New York’s main futures contract, light sweet crude for delivery in February, was up US$0.32 to US$81.83 (K221.16) a barrel in morning trade.
Brent North Sea crude for February delivery gained US$0.11 to US$80.23 (K216.84).
“It’s an encouraging sign to see quite reasonable declines in the stockpiles of distillates… so you’ve got a bit of momentum in the market,” Mark Pervan, senior commodities analyst at ANZ bank in Melbourne, said.
Prices were also lifted by news of robust activity in the US manufacturing sector, in a further sign that the US economy, a key engine for global growth, is well on its way to recovering from a deep recession.
The Institute for Supply Management said its manufacturing index, also known as the purchasing managers index, climbed to 55.9% in December from 53.6% in November, for a fifth consecutive month of expansion.
The figure was stronger than the consensus estimate of a modest rise to 54.3%. Any number above 50% indicates growth.
“Most analysts are brushing over their 2010 outlook and I think most of the market is taking a more favourable outlook on demand than last year,” Pervan said.
London-based consultancy Capital Economics said the rebound in the US manufacturing index “should restore some faith in the sustainability of the industrial recovery”.  – AFP