Tuesday, March 27, 2012

Oil prices mixed in Asian trade

SINGAPORE: Oil prices were mixed in Asian trade Tuesday after the US central bank chief signalled that its easy monetary policy would be kept in place despite recent strong jobs data.

Concerns over dampening Chinese demand as well as global supply inventories also weighed on the market, analysts said.

New York's main contract, West Texas Intermediate (WTI) crude for delivery in May, gained one cent to $107.04 per barrel while Brent North Sea crude for May settlement was down nine cents at $125.56 in morning trade.

"The futures market reacted positively to Bernanke's comments about continued stimulus... but there are concerns about weak demand in China," said Nick Trevethan, senior commodities strategist at ANZ Research.

Fed Chairman Ben Bernanke said in a speech on the outskirts of Washington: "We cannot yet be sure that the recent pace of improvement in the labour market will be sustained.

"Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies."

While unemployment has fallen sharply in recent months and payroll numbers have risen, the economy is still growing at a slack pace, he said, warning that the the bright jobs picture might not continue.

Adding to investor concerns are the recent spate of glum data out of China, including contracting manufacturing activity and a huge trade deficit amid falling demand from debt-wracked Europe -- the biggest buyer of Chinese exports.

"Investors will be watching very closely as more data about China's first quarter performance comes out in the next few weeks," said Trevethan.

Barclays Capital also said prices remain volatile because global crude buffers are thin.

"With spare capacity at no more than 1.7 million barrels per day and inventories well below the seasonal average, the lack of shock absorbents lends itself to an extremely nervous market, the result of which is heightened volatility," it said in a market commentary.

View the original article here

Source From Channel News Asia

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