20 November,2009 10:36 AM IST | | AFP
Oil rose in Asian trade on Friday as investors bought the commodity at more attractive prices, but concerns over the strength of the global economic recovery has injected caution into the market.
New York's main contract, light sweet crude for December delivery, climbed 18 cents to USD 77.64 a barrel after slumping USD 2.12 in US trade overnight. Brent North Sea crude for January rose 23 cents to USD 77.87, after dipping USD 1.83 in London trade.
"The reason that oil is up is probably due to the fact that many investors view pricing below USD 78 a barrel as a buying opportunity," said Victor Shum, senior principal at energy consultancy Purvin and Gertz in Singapore.
"The oil market has shown resistance against breaking through the 80-dollar level simply because the sustainability of economic recovery is still uncertain and oil fundamentals are weak."
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New York crude on Wednesday breached USD 80 a barrel after government data showed crude reserves in the United States - the world's biggest energy consuming nation - fell by 900,000 barrels in the week ending November 13. The decline was more than the 600,000 barrels anticipated by the market.
US gasoline or petrol inventories tumbled 1.7 million barrels, confounding expectations for a small gain. Stockpiles of distillates, which include diesel and heating fuel, fell 300,000 barrels. Analysts had pencilled in a bigger drop of 500,000 barrels.
