World oil prices stable before holiday weekend

27th May 2011, Comments 0 comments

Crude oil prices stabilised on Friday in muted trading before a long holiday weekend in Britain and the United States, where financial markets will remain closed on Monday for public holidays.

The market was steady at the end of a volatile week in which dealers tracked the dollar's fortunes, weak US data, energy demand concerns and renewed jitters over the eurozone debt crisis.

New York's main contract, light sweet crude for delivery in July, rose 18 cents to $100.41 per barrel.

Brent North Sea crude for July slid five cents to $115 a barrel in midday trade.

"We expect low trading volumes and some further consolidation in crude oil prices, ahead of the long holiday weekend in the US and the UK," said Sucden analyst Myrto Sokou.

"Trading conditions continue to remain uncertain, following fairly disappointing economic data from the US and eurozone, uncertainty about a potential debt-restructure in Greece and weaker oil demand from the US, China and Japan.

"In the meantime, currency movements will continue to be the key market drivers, amid these tentative economic conditions."

Oil prices began the week with sharp losses, tumbling on Monday as the dollar strengthened on the back of more European debt problems.

Prices were also pushed lower by indications of slowing economic growth in Asia but then picked up sharply on Tuesday US banks Goldman Sachs and Morgan Stanley both raised their 2012 forecasts for Brent to around $130 a barrel.

Data on Wednesday, showing a surprise increase in American crude stockpiles, took the gloss of that performance.

US crude reserves rose by 600,000 barrels in the week to May 20, confounding expectations of a fall and indicating weak demand, while gasoline inventories jumped a huge 3.8 million barrels, in contrast to predictions of a drop.

Gasoline demand, meanwhile, is expected to pick up as many Americans take to the road for their holidays.

The oil market sank further on Thursday as traders banked profits after two straight days of gains as disappointing US economic data dented investor confidence.

The markets were hoping for an upward revision from the initial reading of 1.8 percent in first-quarter US growth -- but the figures were left unchanged.

Economists said the new figures revealed consumer spending in the period was weaker than previously believed and said the high costs of food and fuel were likely the reason.


© 2011 AFP

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