Brent crude oil prices rise over US$62 as Asian markets open strong

[SINGAPORE] Oil prices rose in early trading on Monday as Asian markets opened strongly into a holiday-shortened week and as consensus spread that Brent crude prices would likely remain above US$60 for the rest of the year.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 per cent in early trade, while Japan's Nikkei stock average was up 0.4 per cent ahead of a Japanese holiday on Tuesday.

Front-month Brent crude prices climbed more than a dollar to over US$62.46 per barrel but had eased back to US$62.25 by 0315 GMT, while US WTI's front-month contracts were up US$0.7 at US$57.83 a barrel.

Analysts said that Brent had received broad support after testing US$60 a barrel at five-and-a-half year lows earlier this month, and that consensus was growing that prices would likely remain above that level for the rest of the year. "We do not expect WTI and Brent to test new lows this week,"Singapore-based Phillip Futures said on Monday.

Reuters technical analyst Wang Tao said that Brent prices would receive support at US$60.77 a barrel and that they were trending up towards a target of US$63.52 per barrel.

Despite the rises on Monday, analysts said they expected relatively low price volatility for the remainder of the year as traders begin to wind down their 2014 positions. "With dealing desks having to close their books, traders going on holidays and a lack of key economic news from around the globe, we do not expect much volatility from now till January 2015," Phillip Futures said.

REUTERS