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| Oil eases off 6-month high ahead of inventory data |
| BS Reporter / Singapore May 28, 2009, 12:07 IST |
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Oil prices eased back from six-month highs today in Asia as investors looked to a weekly US inventory report for signs of crude demand may be recovering.
Benchmark crude for July delivery was down 53 cents to $62.92 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. Yesterday, the contract rose $1 to settle at $63.45, a six-month high.
Traders believe that the Organisation of Petroleum Exporting Countries will keep output levels unchanged at a meeting today in Vienna. Saudi Arabian Oil Minister Ali Naimi predicts that oil prices will likely reach around $ 75 a barrel by the end of the year on the back of growing demand in Asia.
"OPEC is trying to get the world more conformable with the idea of $75- 80 oil," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore.
Oil prices have rebounded from below $35 a barrel as investors anticipate demand will improve later this year. Traders, concerned that a massive US fiscal stimulus package will eventually weaken the dollar, have also used crude oil as a hedge against inflation.
"As long as money is being printed left and right you're going to see it flow into the commodity markets and crude keep going higher," Kornafel said.
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