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Oil prices mixed in Asian trade
[SINGAPORE] Oil prices were mixed in Asia Thursday after first quarter US economic growth fell short of forecasts but a weaker dollar and easing US crude production provided support, analysts said.
US benchmark West Texas Intermediate for June was up eight cents at US$58.66 in late-morning trade, while Brent for June fell 27 cents to US$65.57 a barrel.
The US Commerce Department said Wednesday that the world's biggest economy and top oil consuming nation stalled in the first quarter this year, expanding at an annual pace of just 0.2 per cent, much slower than the 1.0 per cent growth expected by analysts.
"In this globalised economy, it would be difficult to envisage the US economy taking off on its own trajectory - in any huge degree - with the rest of the world still battling the gravity of deflation," said Nicholas Teo, a market analyst with CMC Markets in Singapore.
"Still, the shortfall in the numbers... was rather stark, especially against the backdrop of a steady job market recovery over the past year," he said in a market commentary.
Howie Lee, an investment analyst with Phillip Futures in Singapore, said the poor growth "suggests deep-lying problems" as exports slowed, business investment softened and consumers held back spending despite savings from lower oil prices.
"Many were prepared for a disappointing result, but at 0.2 per cent it probably caught even the most bearish by surprise," he said in a market commentary.
Other analysts said the weaker greenback is helping support prices as dollar-priced oil becomes cheaper, spurring demand.
Signs of cutbacks in US oil output, a key factor in the global supply glut that has driven prices to plunge by as much as 60 per cent since June last year, were also supporting prices.
Inventories at the key US oil terminal hub in Cushing, Oklahoma, reported its first decline since late November, US data showed.