Singapore, April 14: Oil prices slipped to near USD 49 a barrel Tuesday in Asia as traders looked to US bank results this week for signs a severe recession may have bottomed but remained pessimistic that demand for crude can recover in the near term.
Benchmark crude for May delivery fell 78 cents to USD 49.27 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract on Monday dropped USD 2.19 to settle at USD 50.05.
Oil prices have traded near USD 50 a barrel for the last two weeks after jumping from below USD 35 in February as investors struggle to gauge the health of a global economy reeling from its worst slowdown in decades.
Traders have been cheered by early signs that US banks may be stabilizing. Goldman Sachs reported Monday a profit of USD 1.66 billion for the first quarter, beating Wall Street`s earnings expectations, and a huge improvement over the USD 2.29 billion loss that Goldman reported for the fourth quarter.
Goldman`s news, released a day earlier than anticipated, came days after Wells Fargo & Co said it expected to report record first-quarter earnings of USD 3 billion, well above Wall Street`s estimates. Banking giants Citigroup Inc. and Bank of America Corp will report earnings later this week.
"We don`t have the feeling of being in a free fall anymore," Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore. "But we`ve seen quite a big rally, so I wouldn`t be surprised if stock markets and oil come down a little."
The market was still mulling a forecast cut by Paris-based International Energy Agency, which said on Friday it now expects global demand this year will likely fall by 2.4 million barrels a day to 83.4 million barrels, or 2.8 percent lower than last year.
"The old theme of demand destruction is still controlling crude right now," Moltke-Leth. "I see a range of USD 47 to USD 53 holding for a while."
In other Nymex trading, gasoline for May delivery fell 0.65 cents to USD 1.39 a gallon and heating oil dropped 0.71 cents to USD 1.46 a gallon. Natural gas for May delivery slid 2.0 cents to USD 3.61 per 1,000 cubic feet.
In London, Brent prices fell 44 cents to USD 51.70 a barrel on the ICE Futures exchange.
Bureau Report
