Oil recovers in Asia trade after previous week's sharp falls
AFP - 1 hour 50 minutes ago
SINGAPORE, Dec 8, 2008 (AFP) - Oil prices recovered in Asia trade Monday, rising by more than a dollar after sharp declines at the end of last week in reaction to a shocking set of US jobs data, dealers said.
Despite the recovery, underlying sentiment remains fragile on deep concerns about weak energy demand, especially in the recession-hit US economy, the world's leading oil consumer, they said.
New York's main contract, light sweet crude for January delivery, gained 1.62 dollars to 42.43 dollars after closing 2.86 dollars lower at 40.81 dollars on the New York Mercantile Exchange Friday.
It brushed the 40-dollar psychological barrier in intraday trade Friday, sinking to 40.50 dollars, its lowest level since December 2004.
Brent North Sea crude for January delivery rose 1.62 dollars to 41.36 dollars a barrel. The contract closed Friday 2.54 dollars down at 39.74 dollars, a low last seen in January 2005.
"I think we have seen a modest recovery in oil prices following very heavy declines last Friday," said David Moore, a Sydney-based commodity analyst with the Commonwealth Bank of Australia.
Oil prices sank Friday after the release of worse-than-expected jobs data in the United States, raising the prospects of a severe fall in energy demand.
The US Labor Department reported Friday that a staggering 533,000 jobs were slashed in November, sending the unemployment rate to 6.7 percent, its highest level since October 1993.
The number of job losses was the largest in 34 years and much higher than the 325,000 expected by private forecasters, suggesting the recession in the world's largest economy would be longer and deeper than feared.
"At this point, I think the concerns of weakening oil consumption has not gone away," said Moore.
"The US job figures were very weak and reinforced worries about weak oil consumption," he said.
Oil prices have plunged by more than two-thirds since reaching record highs above 147 dollars on July 11 as the global economic slowdown widened, raising worries about weakening demand.
The International Energy Agency on Friday lowered its projections for global oil demand in 2008-2013, foreseeing annual growth of 1.2 percent instead of 1.6 percent amid the worldwide economic slump.
The US, eurozone, Japan and other economies are already in recession, and investors are worried about falling oil demand among the industrialised countries and a slowdown in major emerging countries such as China.
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