Oil prices up in Asian trade

Jan 16 2013 07:59

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.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

commodities  |  markets  |  oil



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What’s on your gift list this Christmas?

Previous results · Suggest a vote