Oil prices rebound in Asian trade

[SINGAPORE] Oil rebounded in Asia on Wednesday as traders bought the commodity at cheaper prices following a slide to near six-year lows, analysts said.

US benchmark West Texas Intermediate for February, which dived US$2.20 Tuesday, was up 34 US cents at US$46.81 in late-morning trade.

Brent North Sea crude for March added 26 US cents to US$48.25 after tanking $1.97 at closing on Tuesday.

Analysts, however, do not expect the upturn to last, as a weakening global demand and a supply glut show no signs of abating.

"The slight increase is likely due to profit-taking trade as a result of yesterday's slide in prices," said Tetsu Emori, commodity fund manager with Astmax Investments in Tokyo.

"Oil prices will likely remain at a low level this week once this period of bargain hunting is over," he told AFP.

Analysts said demand will likely take a further hit after the International Monetary Fund sharply cut its forecast for global economic growth this year, citing weaker momentum in nearly all leading economies but the United States.

The IMF said in a report released Tuesday that poorer prospects in China, Russia, the euro area and Japan would hold world growth to just 3.5 per cent this year and 3.7 per cent in 2016.

Oil prices have lost more than half their value from above US$100 in June last year.

AFP