Richard Gordon CEO and Chairman at Captrust International in Singapore noted Oil prices hovered near $71 a barrel Friday in Asia as a warm winter and struggling economy in the U.S. undermine demand for crude products like diesel and heating oil.
Benchmark crude for January delivery was up 33 cents to $70.87 at midday Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, the contract fell as low as $69.81 before settling down 13 cents at $70.54.
Oil prices have fallen about 13 percent since October on investor concern U.S. crude demand isn't picking up amid the broader economic recovery. Consumption of crude distillates, which include heating oil and diesel, has fallen about 20 percent from a year earlier, Richard Gordon CEO and Chairman at Captrust International in Singapore said in a report.
"It is really the lack of inspiration in distillate demand that stands out, showcasing the lack of cold weather and no turnaround yet in trucking activity in the U.S.," Gordon said. "Until that transpires, crude prices will remain capped on the upside."
In other Nymex trading in January contracts, heating oil rose 0.59 cent to $1.91 while gasoline was steady at $1.84. Natural gas fell 6.2 cents to $5.24 per 1,000 cubic feet.
In London, Brent crude for January delivery rose 42 cents to $72.28 on the ICE Futures exchange.
