Oil higher in Asian trade
SINGAPORE — Oil prices were higher in Asian trade Monday, lifted by buoyancy in regional stock markets, but analysts said the spectre of another global recession was expected to limit gains.
New York’s main contract, West Texas Intermediate crude for delivery in September, was up one cent to $85.39 a barrel in afternoon trade.
Brent North Sea crude for September advanced 11 cents to $108.14.
“Asian stocks are gaining and so oil futures are rising in parallel to that,” said Victor Shum, an analyst with Purvin and Gertz energy consultancy in Singapore.
“But I expect that the market will continue to be rocky and volatile because there’s still concern about a potential return of the global economy to a recession,” he told AFP.
“Traders will be wary and the wariness will limit any upside in the short term for crude.”
Asian stocks were higher, with Tokyo getting a boost from better-than-expected gross domestic product (GDP) figures that showed the country is on the road to recovery after its devastating tsunami.
Asia followed a positive end to Wall Street’s week with gains in all the main regional markets, giving dealers hope after a turbulent few days during which they were battered by eurozone debt fears and a US credit downgrade.
But fears over a double-dip recession continued to haunt the markets.
World Bank chief Robert Zoellick said in Australia on Sunday that investors had lost confidence in the economic leadership of several key countries and warned that global markets were in a “new danger zone” as a result.
Zoellick said a convergence of events in the United States and Europe had rattled investors in countries already struggling to cap sovereign debt issues and unemployment.
“And what we’ve seen is that confidence is a fragile element of how the market economy works,” he said.
Singapore Prime Minister Lee Hsien Loong also said in a key policy speech Sunday that Asia, including China and India, would be vulnerable if the United States and Europe sank into another recession.
