Oil prices up in Asia

[SINGAPORE] Oil prices rose in Asia Friday after recent heavy falls, but analysts said the upturn is not likely to be very strong owing to excessive global supplies.

US benchmark West Texas Intermediate for February delivery was up 44 cents at US$49.23 a barrel in late-morning trade and Brent crude for February gained 31 cents to US$51.27. Brent on Wednesday briefly slipped below US$50 for the first time since 2009.

Confidence was given a much-needed boost by minutes from the US Federal Reserve's December meeting suggesting the US central bank will not hike interest rates before April.

Analysts however warn that the significant factors of oversupply and low demand in major economies such as India and China will continue to weigh on oil prices.

"There is still no indication that US shale production will be reduced or that there will be sudden surge in global demand for oil," said Shailaja Nair, associate ediorial director at energy information provider Platts.

In a research note, analysts from German lender Commerzbank said there was no reversal in the downward trend in oil prices.

Oil has lost more than half its value since June when prices were well above US$100 a barrel.

But analysts say lower prices will be a boost to oil-importing countries worldwide.

Rajiv Biswas, Asia Pacific chief economist at international consultancy IHS, said "the slump in world oil prices represents an estimated transfer of around US$1.5 trillion from global oil producing countries to oil importing countries, and Asian oil importing industrial nations are among the biggest winners".

AFP