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Oil rises in Asia on positive US data, stocks

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[March 26, 2009]  TOKYO (AP) -- Oil prices rose above $53 a barrel in Asia Thursday as encouraging U.S. data on durable goods orders and home sales spurred hopes for a recovery in crude demand.

Gains in U.S. and Asian stock markets also supported oil prices, and the uptick in sentiment appeared to be enough to temper concerns over sharply accumulating inventories in the U.S.

RestaurantBenchmark crude for May delivery rose 74 cents to $53.50 a barrel by midday in Asian electronic trading on the New York Mercantile Exchange.

Oil prices fell Wednesday -- the contract sank $1.21 to settle at $52.77 a barrel -- on news that crude in storage last week rose 3.3 million barrels to 356.6 million barrels, according to the Energy Information Administration Wednesday, much more than what was expected. The figure marks a 15.6 percent rise from year-ago levels, and stockpiles are now at their highest level since 1993.

But traders seemed to shake that off amid hopeful signs in the U.S., the world's biggest oil consumer. Durable goods orders increased a better-than-expected 3.4 percent last month, the first advance since July and the strongest one-month gain in 14 months, the Commerce Department said. New home sales also rebounded, rising 4.7 percent to a seasonally adjusted annual rate of 337,000


"We could see today the rally go slightly higher from here on yesterday's figures," said Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore. "You have a little modest rally in Asia on the back of that, and that's sort of helping crude a bit."

Asian markets gained after a late rally on Wall Street Wednesday that lifted the Dow Jones industrials 1.2 percent.

But Moltke-Leth warned against reading too much into Thursday's bump. He predicted that prices will be capped around $55 and could fall as low as $43 a barrel over the next two weeks as other big countries release key economic indicators that could very likely be grim.

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Japan, which said exports plunged by nearly half in February, will release a quarterly business sentiment survey called the "tankan" next Wednesday that could be quite depressing.

"Japan is the world's third-largest oil consumer, and the tankan is expected to drop to a 30-year low," Moltke-Leth said. "I see more demand destruction down the way."

In other Nymex trading, gasoline for April delivery gained 0.46 cent to $1.4996 a gallon, while heating oil rose 0.33 cent to $1.4680. Natural gas for April delivery fell 0.4 cent to $4.325 per 1,000 cubic feet.

In London, Brent prices rose 95 cents to $52.70 a barrel on the ICE Futures exchange.

[Associated Press; By TOMOKO A. HOSAKA]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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