Rising by 30% this month, oil prices in Asia continue to hover around US$53 per barrel. Benchmark crude for May delivery is at US$53.5 on the Nymex. Oil prices have started inching up in anticipation of a speedy recovery if the US economy triggered by the government's move to rid ailing banks of upto US$1 trillion of toxic assets. The new measures seek to combine government and private resources to purchase an initial US$.5 trillion of bad assets off the balance sheets of banks. Eventually, the plan could increase to US$1 trillion.
The market continues to question the sustainability of the price rally, as oil demand still shows no sign of recovering. As inventories remain high and markets continue to be oversupplied, oil prices still remain vulnerable. Traders will continue to be on the lookout for signs of improvement in oil demand. Clear signals could come during the summer driving season in late May in USA.