World oil prices recover in Asia

October 09, 2012 | 14:32

(0) user say

World oil prices recovered in Asian trade Tuesday owing to tensions between Syria and Turkey, but bad news on the regional and global economy fostered an atmosphere of caution.

New York's main contract, light sweet crude for delivery in November, was up 85 cents to $90.18 a barrel in afternoon trade, while Brent North Sea crude also for November advanced 73 cents to $112.55.

Concerns over an escalation of violence in the oil-rich Middle East have grown as Turkey and Syria engage each other in artillery exchanges across their border, Justin Harper, an analyst with IG Markets Singapore, said.

However, analysts said sentiment was being clouded by a gloomy global economic outlook after the International Monetary Fund and World Bank slashed their 2012 growth forecasts.

The IMF cut its forecast for Chinese economic growth this year to 7.8 percent, while the World Bank said it expected the world's second-largest economy to grow at a slower-than-expected 7.7 percent.

Crude oil prices are "facing plenty of downward pressure as China growth expectations continue to be pared back", said Harper.

He added that the forecasts have left "a thick black cloud of uncertainty" over a region still outpacing the rest of the world economy.

Phillip Futures said in a report that "China's economic growth and demand for petroleum have been key supports for oil prices since global energy demand was hit by recession after the financial crisis".

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional