World oil prices rebounded in Asian trade yesterday after tumbling to four-year lows before the Christmas break, with economic gloom weighing on the market, analysts said.
New York’s main contract, light sweet crude for February delivery, rose US$0.93 to US$36.28 a barrel after closing down US$3.63 at US$35.35 in US trade on Wednesday. Brent North Sea crude for February delivery rose US$1.04 to US$37.65. In London the contract settled on Wednesday US$3.75 lower at US$36.61, its lowest since July 2004.
After taking a one-day trading break for Christmas, oil reopened higher yesterday partly because of technical factors, said Ken Hasegawa, manager of the energy desk at Newedge Japan brokerage.
“After a sharp drop in sentiment on Wednesday, before the holidays, today [there is] a slight technical rebound,” he said from Tokyo.
Another factor boosting prices was the US government’s latest weekly report on crude stockpiles in the world’s largest energy consumer, Hasegawa said.
The Energy Information Administration (EIA) report, released on Wednesday, showed US crude inventories sank 3.1 million barrels in the week ending last Friday. The drop was far heavier than market expectations.
The EIA said crude reserves were 9.1 percent higher than at the same stage last year.
Analysts said that recent US data showing that the world’s biggest economy remains in a recession were likely to keep crude oil prices under pressure in the immediate term.
A sharp global economic downturn that has slashed the world’s demand for energy has led the price of crude oil to collapse by about 75 percent since hitting record highs above US$147 per barrel in July.
Oil markets are pricing in a continued decline in economic activity despite efforts by governments around the world to stimulate activity, MF Global energy analyst John Kilduff said.