Oil prices mixed in Asian trade

ABS-CBN News

Posted at Oct 20 2011 11:01 AM | Updated as of Oct 20 2011 07:01 PM

SINGAPORE - World oil prices were mixed in Asian trade Thursday in a market clouded by concerns over the struggling US economy and discord over a rescue plan for troubled eurozone nations.

In morning trade, New York's main contract, light sweet crude crude for November delivery, was down eight cents at $86.03 a barrel, extending sharp falls in New York after a glum assessment of the US Federal Reserve.

Brent North Sea crude for December was up 21 cents to $108.60 after reports of renewed threats to oil production in Libya from forces loyal to ousted leader Moamer Kadhafi.

Analysts said the overall mood was being dictated by economic worries, with investors waiting for results of a summit by European leaders this weekend on how to prevent the debt crisis from further escalating.

Initially limited to Greece, Europe's almost two-year-old debt crisis has spilled across borders, threatening large economies as well as the continent's banks.

"Markets will look to this weekend’s European economic summit for some signs that a workable plan can be crafted to reduce the market stress," said Sanjeev Gupta, head of the Asia-Pacific Oil & Gas practice at Ernst & Young.

Capital Economics business consultancy said it expects growth to be "very low or negative in most advanced economies" next year.

"The eurozone is already heading for recession, and if its public debt and banking crisis is not contained, the rest of the developed world may follow suit," it warned in a market commentary.

"The United States should avoid another technical recession in the coming quarters, but its recovery looks set to remain lacklustre for years to come," it added.

"Households have made little progress in paying down debt, job creation is slow and private investment growth will be weak, judging by recent business surveys."

The United States is the world's biggest economy and consumes more oil than any other nation.