0
SINGAPORE: Oil prices slipped in Asian trade on Thursday, with weaker US energy demand and fears the eurozone debt crisis could re-ignite casting a shadow over the market, analysts said.
New York's main contract, West Texas Intermediate crude for delivery in May was down 28 cents to $102.42 per barrel while Brent North Sea crude for May shed 21 cents to $119.97 in morning trade.
The dip in oil prices came despite equities markets rebounding from the previous day's sharp falls that were sparked by renewed eurozone fears.
“The main factor depressing oil prices... is the rise in US crude stocks once again,” said Nick Trevethan, senior commodities strategist at ANZ Research in Singapore.
The US Department of Energy on Wednesday reported that the nation's crude oil stockpiles rose 2.8 million barrels in the week ended April 6, higher than the 2.2 million barrels estimated by analysts.
A spike in crude inventories in the US typically indicates faltering demand in the world's largest economy and oil consumer.
Worries over financial stability in the eurozone also continued to weigh on the market.
“Markets have been sunning themselves with a worst-is-over-for-eurozone mentality only to be caught in a thunderstorm of Spanish and Italian debt fears,” said Justin Harper, market strategist at IG Markets Singapore.
“With Europe's third and fourth-largest economies struggling to balance tough austerity measures while reducing government debts, traders have become very nervous about the crisis re-igniting.”
However, oil prices remain propped up by supply concerns in the Middle East, according to Trevethan, adding that the tensions there were adding a $10 “risk premium”.
Iran is expected to meet representatives of six powers -- Britain, China, France, Germany, Russia and the United States -- this weekend for talks about its controversial nuclear programme.
The Islamic republic has vehemently denied Western assertions it is building a nuclear bomb and has threatened to shut the strategic Strait of Hormuz, a major passageway for a fifth of the world's oil supply, if it is hit with further sanctions.
