Oil falls below $65 in Asian trade

Oil falls below $65 in Asian trade
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First Published: Fri, May 29 2009. 08 29 AM IST
Updated: Fri, May 29 2009. 08 29 AM IST
Singapore: Oil prices fell in Asian trade on Friday after touching new six-month highs overnight on an unexpected big drop in US crude reserves, analysts said.
New York’s main contract, light sweet crude for July delivery, dropped 36 cents to $64.72 a barrel.
Brent North Sea crude for July delivery was off 39 cents to $64.
During US trading on Thursday, New York crude jumped as high as $65.35 before easing to close at $65.08, its highest finish since 4 November.
Crude prices have surged in recent days on growing optimism energy demand would pick up on hopes that the US economy is on the mend, analysts said.
“In the most general terms, the oil market still seems to be optimistically embracing the idea that the worst of the recession has passed,” said Mike Fitzpatrick of MF Global.
OPEC’s decision on Thursday to maintain its production level at 24.84 million barrels a day despite a glut of crude also signals the cartel’s optimism that demand would pick up soon, analysts said.
“There is widespread belief within the organization that the worst of the economic downturn has passed, and that a gradual recovery is beginning,” said analyst David Kirsch from consultancy PFC Energy.
The Organisation of the Petroleum Exporting Countries (OPEC), which pumps 40% of the world’s crude, made the decision at a meeting in Vienna.
The US Department of Energy on Thursday reported that American crude stockpiles tumbled by 5.4 million barrels last week, while analysts had expected a drop of only 500,000.
Gasoline (petrol) stockpiles fell by 600,000 barrels, the department said. This was far less than the 1.7 million forecast by analysts.
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First Published: Fri, May 29 2009. 08 29 AM IST
More Topics: Oil | Dollar | US | Trade | Commodities |