Oil prices diverge amid profit-taking
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LONDON, Jan 23 AFP
January 24 2013, 04:41AM
Global oil prices traded mixed on Wednesday, as some dealers cashed in recent gains, on the eve of the weekly snapshot of crude inventories in top global crude consumer the United States.
Brent North Sea crude for delivery in March added 26 cents to $US112.68 ($A107.20) a barrel in London late afternoon deals.
New York's main contract, light sweet crude for March, retreated 27 cents to $96.41 per barrel.
There is a "bit of profit taking in crude following four sessions of gains, with many (traders) expecting refiners to start seasonal maintenance that will reduce crude oil demand," said ETX Capital markets analyst Ishaq Siddiqi.
"Not a major surprise following the strong run we have seen in the commodity, that investors will start to book profits."
The US government's Department of Energy will on Thursday publish its weekly report on American energy inventories for the week ending January 18. The report is due one day later than normal owing to a public holiday earlier this week.
"Traders now expect upcoming US government oil inventory data to show crude-oil stocks dropped 2.3 million barrels last week," added Siddiqi.
"US stocks are mixed on the whole with IBM's strong numbers pushing the Dow Jones Industrial Average up sharply and Google helping too, propping up the Nasdaq index."
Meanwhile, fears of a political gridlock in Washington over fiscal issues appear to have eased, analysts noted.
Fiscal difficulties are "still there but the risks of falling/jumping off a cliff are much lower than in December", DBS Research said in a market commentary.
"Moreover, Republicans appear to be backing away from a showdown on the debt limit. Increasingly they view the threat of shutting down the government - unless their spending demands are met - as counter-productive," it added.
"More and more of the right words are being heard and to the extent markets are rebounding from excessive fiscal fears, this is more soothing music."
Crude futures had risen on Tuesday on signs of stronger economic growth in Europe and fresh economic stimulus measures announced by Japan's central bank.
Over the longer term, oil is likely to remain supported by encouraging news from Europe, the US and Japan, analysts said.
A survey published on Tuesday showed that German investor sentiment was at its highest level since the start of the eurozone debt crisis in 2010, as the outlook for Europe's top economy continues to brighten.