Singapore: Oil prices hovered near $99 in Asia trade on Monday as traders continued to fret over tight supplies globally, dealers said.
In early morning trade New York’s main contract, light sweet crude for January delivery, was up 57 cents at $98.75 a barrel from $98.18 in late US trades Friday.
Brent North Sea crude for January delivery rose 62 cents to $96.38.
“The market is fundamentally tight and one of the factors at present supporting prices is the tight market,” said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.
A decision on whether or not to increase output when the Organisation of Petroleum Exporting Countries (Opec) meets on 5 December will be closely watched by the market, said Moore.
“That will be very important no matter what the decision is,” he said. “The decision is an important one for the oil market in terms of the perceived balance between demand and supply.”
Dealers also cited US government data showing that energy stockpiles had fallen more heavily than expected.
US reserves of distillates, including crucial heating fuel and diesel, also fell more than had been forecast.
Heating fuel demand is expected to pick up as the Northern hemisphere winter kicks in next month. The US northeast region is the world’s biggest user of heating oil.
The price of oil has surged by about 64% since the start of 2007, supported by supply disruptions in key producers such as Nigeria, strong demand from China and India, and jitters over the Iranian nuclear crisis.