Oil lowers to $77 in Asia trade on profit-taking

Oil lowers to $77 in Asia trade on profit-taking

Singapore: Oil was lower in Asian trade Thursday after a strong overnight rally on the back of positive US data and a weak dollar, analysts said.

New York’s main contract, light sweet crude for January delivery, fell 50 cents to $77.76 a barrel.

Brent North Sea crude for January delivery dropped 47 cents to $77.97.

Prices surged overnight as fresh US data showed jobless claims fell in the week ending 21 November to an adjusted 466,000, the lowest since September 2008.

A separate report showed consumer spending rose more than expected in October, and a third said sales of new homes rose at their strongest pace since September 2008.

“The overwhelming (market) sentiment was based on the economic news," said Andy Lipow, analyst at Lipow Oil Associates.

Crude prices probably eased off in morning Asian trade as investors switched focus to digest the weekly oil data from the US Department of Energy (DoE), analysts said.

“The inventory numbers were uninspiring so there was not anything to drive the market higher," said Jason Feer, Singapore-based regional vice president for energy analysts Argus Media.

“Demand fundamentals are still fairly weak."

The DoE said Wednesday in its weekly report that crude stocks rose by one million barrels in the week ended November 20 and gasoline reserves were up by the same amount.

The weekly DoE report is closely watched by the market because the US is the world’s biggest energy consumer.

Meanwhile, Opec member Algeria said the oil cartel was likely to maintain its production levels when the organisation meets next month in Angola.

“We are going to keep the same output level until we have a clearer vision of the world economic situation," Algeria energy minister Chakib Khelil said in a report carried by the APS news agency.

The Organisation of the Petroleum Exporting Countries supplies 40% of the world’s crude.