Oil prices bounce back to US$74 in Asian trade in anticipation of US gasoline data

19-Jul-06

Asian trade saw a spike in crude oil prices amid expectations that midweek U.S. inventory data would show a drop in domestic gasoline stocks as strong demand for motor fuel continues during the summer driving season. Light, sweet crude for August delivery rose to US$73.96 a barrel in electronic trading on the New York Mercantile Exchange as of midmorning in Singapore. This follows the slide in crude oil prices on Tuesday when the contract tumbled 2% to settle at US$73.54 a barrel. Analysts opine that U.S. gasoline stocks are expected to fall by an average of 1.1 million barrels in the week ended July 14, continuing the previous week's drop and reflecting seasonal trends. The market is abound with concerns about the fighting between Israel and militants in Lebanon that could escalate into a full-blow war, possibly pulling in Iran (financial backer of Hezbollah) into the conflict.