Oil prices above $59 in Asian trade

I / Singapore May 19, 2009, 13:26 IST

Oil prices rose above $59 in Asian trade today on hopes for a relatively quick rebound in the US economy and the escalating unrest in African crude producer Nigeria. New York's main futures contract, light sweet crude for delivery in June, reversed earlier losses and was trading 62 cents higher at $59.65 per barrel in the afternoon. Brent North Sea crude for July was up 67 cents to 59.14.

US stocks soared yesterday after better-than-expected earnings from home improvement retailer Lowe's helped reinforce hopes for a recovery in the United States. A strong US economy is a key growth engine for the world because it is a major export market for many countries.

"Oil seems to stay resilient in spite of ample supply as it continues to focus on the prospects of economic recovery and the rising risk of commodity price inflation," said Phil Flynn at Alaron Trading. A rebound from the global downturn will boost oil demand and lift prices higher. Oil prices were also boosted by rising violence in oil exporter Nigeria, where the country's main armed group said it had ordered a blockade of key shipping channels in a bid to inflict further damage on the energy industry. Nigeria's military has urged oil firms to ignore the threat.