Oil prices up in Asia on bargain-hunting

Sharp falls during the previous day on forecasts of surging production in the US affected prices

Oil prices rebounded in Asia today as traders pounced after sharp falls the previous day on forecasts of surging production in the United States, analysts said.

New York's main contract, West Texas Intermediate (WTI) for December delivery, was up 16 cents at $93.20 a barrel in mid-morning trade, while Brent North Sea crude for December gained 19 cents to $106.00.

WTI tumbled $2.10 in New York and Brent eased 59 cents after the International Energy Agency forecast the United States would become the world's top oil producer by 2015 thanks to booming shale oil output.

In its annual World Energy Outlook report released yesterday, the EIA also said the US, currently the world's top crude consumer, is moving "steadily towards meeting all of its energy needs from domestic resources by 2035".

David Lennox, resource analyst at Fat Prophets in Sydney, told AFP that dealers "reacted strongly" to the prospect of flush US supplies, causing the decline in WTI prices in New York.

"Self-sufficiency in the United States was always on the horizon, but the timeline reported by the EIA really caused a shake-up for traders," he said.

Investors are keeping an eye on the West's attempts to forge a nuclear deal with Iran that could lead to a lifting of sanctions and release more of its oil into the global marketplace.

"I think traders realise that it will take a long time for a final completion of a deal regarding Iran as there are many parties involved and a lot of opposing views," Lennox said.

The US, one of the six major powers negotiating with Iran, yesterday warned that fresh sanctions on the Islamic republic proposed by key lawmakers could derail the diplomatic effort and risk war.