Oil prices rise in thin Asian trade

27-Dec-06

As most market participants are on holiday leaving very few factors to spur interest, oil prices were higher in thin holiday Asian trade, recovering ground lost on Friday. New York's main contract, light sweet crude for February delivery was higher at US$62.78 a barrel. Brent North Sea crude for February rose to US$62.87. Heating oil demand has been dampened by an unusually mild winter in the US and expectations of warmer weather likely persist into January. Figures released last week showed US distillate products reserves, including heating oil and diesel, increased 1.2 million barrels to 133.1 million in the week ended December 15. Analysts had expected a drop of 600,000 barrels. However, inventories of crude oil slumped 6.3 million barrels to 329.1 million, more than triple the decline expected. Concerns continue to persist over developments in Nigeria, Africa's largest oil producer and the world's fifth biggest exporter, earning more than 90% of its foreign revenue from the sector.