(1888PressRelease)
May 20, 2009 - Oil hovered above $59 a barrel Tuesday in Asia after investors took heart from signs the U.S. recession is easing. Benchmark crude for June delivery was up 10 cents to $59.13 a barrel midday in Singapore in electronic trading on the New York Mercantile Exchange. On Monday, the contract jumped $2.69 to settle at $59.03.
Investors on Monday cheered a better-than-expected profit report from home improvement chain Lowe's Cos., an uptick in homebuilder sentiment and positive comments from analysts about U.S. banks, all of which suggested the U.S. economy is gradually emerging from a severe recession. The Dow Jones industrial average jumped 2.9 percent. While most analysts expect oil prices to increase over the next year as global economic growth recovers, some suspect the recent surge from below $35 a barrel in March may have gone too far, too fast.
"The move from $40 to $60 has happened faster than we thought it would," said Stephen Yang, an Analyst with Seedorf Luxman & Partners in Singapore. "But a year from now oil prices should be modestly higher than where we are today." “The jump in prices for gasoline and other oil products shouldn't choke off a fledgling recovery in consumer demand since the fall from $147 a barrel in July helped free up extra spending cash,” Yang said.
"We've got our eye on it, but we're not overly concerned," the Seedorf Luxman & Partners analyst said. "Oil versus a year ago is still down a whole bunch." In other Nymex trading, gasoline for June delivery was steady at $1.76 a gallon and heating oil was steady at $1.48 a gallon. Natural gas for June delivery rose 1.1 cents to $4.15 per 1,000 cubic feet.
In London, Brent prices fell 3 cents to $58.44 a barrel on the ICE Futures exchange.
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