Source AP ©

Oil prices inches lower in Asia

Oil prices inched lower Friday in Asia, after rising overnight the first time in four sessions as investors began to question if supplies of crude and products are sufficient for coming winter demand.

Light, sweet crude for November delivery slipped 19 cents to US$81.25 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract rose $1.50 to settle at $81.44 a barrel Thursday on the New York Mercantile Exchange.

"There's been some very minor profit-taking today but it's just part of the volatile trade in oil markets," said Victor Shum, a Singapore-based energy analyst with Purvin & Gertz. "The crude oil market remains fundamentally tight in the fourth quarter and prices should hold steady above the S$80 mark."

"Participants view it as a buying opportunity when prices fall to US$79 so that should be a rather strong support," he said.

The U.S. Energy Department reported Wednesday that crude inventories rose by 1.2 million barrels last week, while supplies of distillates, which include heating oil, fell by 1.2 million barrels. Traders say the increase in crude supplies is inadequate, especially as winter approaches.

At the end of the third quarter, many U.S. refineries shut down for maintenance and regear their operations to turn out more home heating oil for the Northern Hemisphere winter. That ramp up as they return to production could start as soon as this month and increase demand for crude oil.

Analysts add that the lingering threat of hurricanes and a weak U.S. dollar also continue to support high oil prices.

Oil and other commodities denominated in dollars are actually falling in price in the eyes of foreign investors, because the greenback has been sliding against other currencies following the Federal Reserve's recent interest rates cuts and some expectations that another rate cut is coming.

Traders shrugged off two reports Thursday that suggest the U.S. economy may be slowing. The Labor Department said applications for unemployment benefits jumped by 16,000 last week, the biggest increase since May and above analyst expectations. The Commerce Department said factory orders dropped by 3.3 percent last month, worse than the 2.8 percent decline analysts forecast.

Energy investors usually worry that a slowdown in the economy could mean demand for petroleum products will fall. The fact that traders ignored the reports reinforces many analysts' view that supplies are tight enough to support high energy prices.

November Brent crude fell 32 cents to US$78.65 a barrel on the ICE futures exchange in London.

Nymex heating oil futures lost 0.5 cent to US$2.2263 a gallon (3.8 liters) while gasoline prices slipped 0.02 cent to US$2.0520 a gallon. Natural gas futures fell 6.7 cents to US$7.345 per 1,000 cubic feet.

Comments
Putin's three days in Singapore mark Russia's major geopolitical changes since 2000
Putin's three days in Singapore mark Russia's major geopolitical changes since 2000
Russians lose faith in their future, get ready for worse
Macron challenges Trump. French independence and croissants at stake
Russia unveils nuclear-powered interstellar spaceship
Russia unveils nuclear-powered interstellar spaceship
Moving inexorably towards war
Russians lose faith in their future, get ready for worse
Sanctions do not stop foreign countries from buying Russia's S-400 systems
Sanctions do not stop foreign countries from buying Russia's S-400 systems
Russians lose faith in their future, get ready for worse
Russians lose faith in their future, get ready for worse
Putin dislikes the idea of US army bases coming to Kuril Islands
NATO to build prestrike staging base in Georgia
NATO to build prestrike staging base in Georgia
The difference between Polish and Ukrainian nationalism is plain to see
Sanctions do not stop foreign countries from buying Russia's S-400 systems
Sanctions do not stop foreign countries from buying Russia's S-400 systems
Russia rips its economy apart with help from the West
Hillary in 2020?
NATO to build prestrike staging base in Georgia