US economy hopes buoy oil prices

2012-03-14 09:48

Singapore - Oil prices were mixed in Asian trade on Wednesday afternoon as upbeat economic data and Middle East tensions supported markets while investors took profits from recent gains, analysts said.

New York's main contract, light sweet crude for delivery in April was up a cent to $106.72 while Brent North Sea crude for April delivery shed nine cents to $126.13.

"The market still remains quite bullish overall, supported by optimism about the world economy," said Justin Harper, market strategist at IG Markets Singapore.

Oil prices have climbed steadily in the past week thanks to improved sentiment about the US economy, the world's largest oil consumer.

And further support was added on Tuesday, with data showing US retail sales grew 1.1% from January, the sharpest rise in five months, suggesting improvement in consumer spending.

Elsewhere, traders were also closely watching the stand-off between crude producer Iran and the West over Tehran's nuclear programme, which Washington fears is being used to build weapons.

The Islamic republic has been hit with a raft of economic sanctions over the issue and Tehran has warned that it will blockade the strategic Strait of Hormuz - a conduit for one-fifth of the world's oil supply - if it faced any more. Such a move would send the price of oil soaring.

"(We) can't hide the fact that we rely on the politically-sensitive Middle East for so much of our energy needs and will continue to do so for the immediate future," said Harper.

Iran denies it is trying to build a bomb and says its nuclear programme is for purely civilian purposes.