Oil prices higher in Asian trade
Agence France-Presse
First Posted 10:58:00 05/16/2008
SINGAPORE -- World oil prices rose in Asian trade Friday amid tight global supplies and as investors continued to buy into the commodity which has given better returns than bonds and equities, dealers said.
In morning trade, New York's main oil futures contract, light sweet crude for June delivery, was up 64 cents to $124.76 per barrel, off its record high of $126.98 a barrel on Tuesday.
London's Brent crude contract for July rose 73 cents to $123.36. The contract for June expired at the close on Thursday, settling at $122.77.
"The bullish enthusiasm in the market remains. The global oil market remains indeed structurally tight," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"Even though demand growth is showing some weakness, supply growth is also not there. OPEC continues to restrain supply and production in non-OPEC states are not expected to be strong," he said, referring to the Organisation of Petroleum Exporting Countries.
Because of the tightness in supply, "the bullish psychology of the market is unlikely to change in the near term," Shum said.
The market is awash with speculative money ready to buy once prices dip to attractive levels, he added.
"Investors are likely to get into oil because oil has performed better than equities and bonds .... There is money looking for better returns and oil is offering better returns."
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