SINGAPORE (AP) - Oil crept above $49 a barrel Thursday in Asia
as glimmers of hope that the U.S. economy may be stabilizing were
weighed against concerns that global demand remains weak.
Benchmark crude for May delivery rose 74 cents to $49.12 a
barrel by midday in Singapore in electronic trading on the New York
Mercantile Exchange. The contract fell $1.27 on Wednesday to settle
Oil prices have pulled back from 3-month highs of above $54 a
barrel last month as investor optimism that the global recession
may be bottoming has waned. Still, some investors have taken heart
from improving U.S. housing data that the worst could be over.
Pending home sales rebounded in February from a record low, the
National Association of Realtors reported Wednesday, while the
Institute for Supply Management's index of manufacturing activity
contracted in March but by a bit less than anticipated.
"You see bright spots here and there," said Jonathan Kornafel,
Asia director for market maker Hudson Capital Energy in Singapore.
"But I think the supply and demand fundamentals will push us
The Energy Department reported Wednesday that crude inventories
continued to rise last week, and gasoline stockpiles jumped despite
predictions for a steep drop.
Crude inventories grew by 2.8 million barrels, or 0.8 percent,
to 359.4 million barrels for the week ended March 27, the
department's Energy Information Administration said in its weekly
report. Oil stockpiles have not been this high since July 1993,
according to EIA data. They're also 15.5 percent above year-ago
Worsening jobs data is also dimming hope that crude demand could
rebound soon. The ADP National Employment Report said Wednesday
that private sector employment dropped by 742,000 in March, higher
Supply cuts by the Organization of Petroleum Exporting Countries
have helped bolster prices this year. OPEC has pledged to reduce
output quotas by 4.2 million barrels a day since September.
Oil will likely trade between $40 and $50 a barrel for the next
few months until investors get a clearer picture of whether massive
stimulus packages across the globe can spark a second-half
recovery, Kornafel said.
"There's been enough supply removed and it seems we've hit
economic bottom," Kornafel said. "I don't think oil belongs below
$40, just as it doesn't belong above $50."
In other Nymex trading, gasoline for May delivery rose 0.83 cent
to $1.38 a gallon and heating oil gained 1.42 cents to $1.36 a
gallon. Natural gas for May delivery fell 4.1 cents to $3.65 per
1,000 cubic feet.
In London, Brent prices rose 62 cents to $49.06 a barrel on the
ICE Futures exchange.