Oil prices down in Asian trade

SINGAPORE, Singapore – Oil prices edged lower in thin pre-holiday trade Wednesday, but analysts said losses were curbed by upbeat sentiment over a strong US economic growth report.

US benchmark West Texas Intermediate for February delivery fell 34 cents to $56.78, while Brent crude for February eased 31 cents to $61.38 in mid-morning trade.

The US Commerce Department said Tuesday the world’s largest economy grew at a spectacular five percent for the third quarter, the best growth rate since 2003.

The figure beat the previous official estimate of 3.9 percent and the 4.3 percent projected by analysts, boosting hopes energy use in the world’s top consumer will rise.

Oil prices have fallen about 50 percent since June on mounting supplies due to increased production and lacklustre global economic growth.

Research house Capital Economics said the figures have fuelled expectations the US economy will grow 2.5 percent in 2014, with “growth of 3.0 percent in 2015 comfortably within reach”.

“The clear strengthening in activity towards the end of 2014” could also prompt the US Federal Reserve to hike interest rates earlier than its timetabled mid-2015 date, the London-based firm said.

Interest rate adjustments are closely watched by crude investors as an increase could strengthen the dollar, making dollar-priced oil more expensive for buyers using weaker currencies, denting demand.

Analysts said trading during Asian hours will remain thin, with many dealers away during the holiday season.

There will be no afternoon trading for financial markets in Hong Kong and Australia on Wednesday. Markets in regional financial hubs, including Singapore and Hong Kong, will be closed Thursday for the Christmas holiday.