Oil prices slightly higher after major gains

Oil prices slightly higher after major gains
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First Published: Fri, Aug 22 2008. 09 51 AM IST
Updated: Fri, Aug 22 2008. 09 51 AM IST
Singapore: World oil prices were higher again in Asian trade Friday after soaring overnight as a crisis deepened between Russia and the West over the invasion of Georgia, analysts said.
New York’s main oil futures contract, light sweet crude for delivery in October, was up 26 cents at $121.44 a barrel.
The contract closed up $5.62 to $121.18 a barrel at the close of floor trading on Thursday at the New York Mercantile Exchange.
Brent North Sea crude for October was 29 cents higher at $120.45 a barrel after settling $5.80 higher at $120.16 Thursday in London.
Jason Feer, of energy market analysts Argus Media in Singapore, said at least part of the rise was due to continuing tensions over Russia’s invasion of Georgia on August 8.
“The markets had sort of assumed that this would all be over reasonably soon,” he said.
Russia, now the world’s biggest producer of crude oil, said it was set to withdraw its forces from Georgia on Friday.
A day earlier it told NATO it was suspending all cooperation, a spokeswoman for the Western military alliance said in Brussels.
Prices had closed higher on Wednesday after the US Department of Energy reported that US gasoline reserves slumped 6.2 million barrels last week, compared with market expectations for a drop of 2.4 million barrels.
Gasoline stocks are closely watched at this time of year, when American motorists take to the highways for their summer vacations, typically pushing up demand for motor fuel.
Feer said it was already clear that high oil prices and weakening economic conditions have severely crimped demand for oil in the United States, the world’s biggest energy consumer.
That trend is spreading to other countries, Feer said.
Despite recent gains, crude has tumbled sharply from record highs above $147 in July.
Venezuela, a member of the Organisation of the Petroleum Exporting Countries (OPEC), said it would ask the cartel at its September meeting to cut production if downward price pressure continued.
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First Published: Fri, Aug 22 2008. 09 51 AM IST