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Oil prices up in Asian trade

Jan 16 2013 07:59 AFP

File, AP)

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Singapore - Oil prices rebounded in Asian trade on Wednesday on stronger US demand for heating oil but an impending showdown in the US Congress over the debt ceiling could limit gains, analysts said.

New York's main contract, light sweet crude for delivery in February was up 15 cents to $93.43 a barrel and Brent North Sea crude for February delivery climbed 22 cents to $110.52.

The gains were driven by data showing better-than-expected demand for distillates, including heating oil, in the United States, said Victor Shum managing director of energy consultancy IHS Purvin and Gertz in Singapore.

Shum said a report by the American Petroleum Institute showed inventories of distillates - refined petroleum products - fell unexpectedly, indicating strong demand.

"The market reacted bullishly to that," Shum said.

He said however that the price increase could be limited by an impending showdown between Republican and Democrat lawmakers in the US Congress on raising the debt ceiling for the world's biggest economy.

"We expect acrimonious talks between the Republicans and Democrats. If the debt ceiling is not raised, the US cannot borrow any more money which will have implications for the US economy and the world," Shum added.

President Barack Obama Monday warned Republicans against using the debt ceiling as a "bargaining chip" in budget negotiations but indications are that the stand-off will continue.

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commodities  |  markets  |  oil
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