Singapore: World oil prices held steady in Asian trade on Friday in a market calmed by slowing global demand, analysts said.
New York’s main contract, light sweet crude for September delivery, was two cents higher at $125.51 a barrel from $125.49 at the close of trading Thursday on the New York Mercantile Exchange.
Brent North Sea crude for September delivery rose 11 cents to $126.55 settling at $126.44 in London on Thursday.
Both contracts rose by more than $1 on Thursday following a tumble of about $4 the previous day. Analysts said a bigger-than-expected increase in US gasoline reserves signalled weaker demand in the United States, the world’s biggest energy consumer.
Ken Hasegawa, manager of the energy desk at Newedge Japan brokerage, said the market had “calmed down” and would trade in a short-term range of $123-128.
“So far, there is no special news in the market,” he said.
Crude oil prices shot to a series of record highs earlier this year, partly because of political tensions involving oil-producing nations like Iran, which refuses major powers’ demands to halt its nuclear programme.
Prices have tumbled since striking record highs above $147 a barrel on 11 July.
Falling demand growth for oil has cooled the market, Hasegawa said. “Overall demand is still growing — providing some support — but the rate of increase has slowed,” he said.
For Alaron Trading analyst Phil Flynn, the bears are coming out of hibernation after months of sizzling price rises.
“The myth that emerging market demand would totally offset the loss of US demand is now being shattered. Price still matters to the demand side of the equation and eventually that will always be the great equaliser in a bull market,” Flynn said.
Uncertainties, including tensions between the West and Iran, continue to provide underlying support to the oil market, Hasegawa said, forecasting a medium-term price range of $120-130 a barrel.
Prices broke through $100 a barrel for the first time at the start of the year.