Oil prices rebound in Asia following US data

AP PHOTO

SINGAPORE–Oil prices rose in Asian trade Friday after a brief dip as dealers digested upbeat US economic data and comments from a Federal Reserve official that its stimulus program will not end soon, analysts said.

New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in August, was up nine cents at $97.14 a barrel and Brent North Sea crude for August gained 18 cents to $103.00 in morning trade.

Kelly Teoh, market strategist at IG Markets Singapore, blamed profit-taking for a fall in prices in early Asian trade, but said “the crude market remains bullish in the long-term with an optimistic outlook on the US economy”.

Both the WTI and Brent contracts surged more than a dollar in closing deals in New York on Thursday as data suggested economic growth in the United States, the world’s top crude consumer, remains at a steady pace.

Figures released Thursday showed consumer spending rebounded in May from April’s fall, incomes were higher, inflation pressures remain low, new jobless claims were slightly improved, and pending home sales were strong.

Oil prices also gained support from comments by New York Fed chief William Dudley, who stressed that the central bank will not shut down its $85 billion-a-month bond purchase program “if labour market conditions and the economy’s growth momentum were to be less favourable” than the Fed currently predicts.

Dudley’s comments showed that the Fed’s monetary policy remains “accommodative rather than tightening,” said Desmond Chua, market analyst at CMC Markets in Singapore.