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Oil prices rise in Asia

Oil prices rise in Asia
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First Published: Fri, May 16 2008. 12 00 PM IST
Updated: Fri, May 16 2008. 12 00 PM IST
By Thomas Hogue / AP
Bangkok: Oil prices rose Friday in Asia following a whipsaw overnight session in which the expiration of options played havoc with prices.
Light, sweet crude for June delivery rose 72 cents to $124.84 a barrel in electronic trade on the New York Mercantile Exchange by midmorning in Singapore.
The contract finished 10 cents lower on Thursday at $124.12 after rising as high as $126.64.
“It’s options expiration madness is what it is,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
“Options let investors bet oil prices will rise or fall in the future. Oil prices can fluctuate widely on days when options expire,” analysts said.
Also, the June crude oil contract expires next week, and that may be adding to the volatility.
Fluctuations in the dollar contributed as well. The dollar has generally been stronger than earlier in the year, but it is waffling between 104 and 105 against the yen, while the euro seems to be range-bound between $1.54 and $1.55.
Investors have been viewing oil and other commodities as a hedge against inflation and a weaker dollar since the middle of last year, and that link has meant that oil has been tending to rise and fall inversely with the dollar.
Meanwhile, natural gas prices tumbled Thursday after the Energy Department said natural gas inventories rose by 93 billion cubic feet last week, more than analysts had expected. That helped pull oil prices down from its early highs in the previous session, analysts said.
In other Nymex trading, heating oil futures rose 1.81 cents to $3.6405 a gallon (3.8 liters) while gasoline prices added 1.42 cents to $3.18 a gallon. Natural gas futures rose 5.1 cents to $11.45 per 1,000 cubic feet.
In London, July Brent crude rose 76 cents to $123.39 a barrel on the ICE Futures exchange in London.
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First Published: Fri, May 16 2008. 12 00 PM IST
More Topics: Oil Prices | Nymex | Brent Crude | Dollar | Yen |