Oil prices flat in Asian trade

Oil prices flat in Asian trade

Singapore: Crude oil prices traded in a narrow range on Thursday in Asia after rebounding several dollars on the US government’s bailout of insurance giant American International Group (AIG), dealers said.

New York’s main contract, light sweet crude for October delivery, was 16 cents lower at $97 a barrel. The contract surged $6.01 to $97.16 at the close of floor trading on Wednesday on the New York Mercantile Exchange.

Brent North Sea crude for delivery in November was unchanged following a gain of $5.62 to $94.84 on Wednesday in London.

Prices traded near $90 at the start of the week after US investment bank Lehman Brothers filed for bankruptcy while another Wall Street firm, Merrill Lynch, was forced to sell itself to Bank of America for $50 billion.

Victor Shum, of international energy consultancy Purvin and Gertz in Singapore, said prices recovered after the US Federal Reserve on Tuesday announced an unprecedented rescue loan of up to $85 billion to save AIG.

The move aimed to head off the company’s collapse which was expected to lead to a global financial calamity in a crisis that grew out of the US subprime, or higher-risk, mortgage sector.

Shum said oil prices had also received some support from a reduction in production and refining after recent hurricanes that hit the Gulf of Mexico.

Oil prices have fallen heavily from record levels above $147 dollars in early July, on worries the global economy is slowing and causing a dent in energy demand.

But prices gained some recent strength from attacks this week on oil facilities in key African producer Nigeria, Shum said, although he added that factor would have been stronger without the global financial worries.

The latest report on US energy stockpiles by the country’s Department of Energy (DoE) provided additional backing for prices.