Crude futures rise above $52 in Asian trade
23 Mar 2009
Oil prices rose above $52 a barrel in Asian trade today, boosted by stronger stock markets and the US government's plan to buy bad assets from banks to contain the financial market turmoil.
Light sweet crude futures for May delivery on the New York Mercantile Exchange was up 30 cents at $52.37 a barrel in Asian trade, up 3 cents from the Friday's close of $52.07 - the first time crude ended the week above $50 since last year.
North Sea Brent crude on the London market gained 45 cents at $51.67 a barrel.
The US Federal Reserve's decision to buy $1.25 trillion of government bonds and mortgage-backed securities and a subsequent rally in the stock markets had also an impact on oil prices, according to analysts.
US treasury secretary Timothy Geithner is set to detail plans that would also seek to entice private investors, including big hedge funds, to offer low-interest loans to finance the purchases and also share risks if the assets fall further in value.
Most marketmen, however, feel the rally may not be sustainable as real global oil demand, unlike the anticipated demand, remains weak.
Sharp OPEC output cuts in recent months and a worsening outlook for non-OPEC production is also expected to squeeze supplies in the second half of the current year.
OPEC member Algeria's energy minister Chakib Khelil on Sunday said he expected crude oil prices to hit $62 per barrel by the end of the year.