Oil trades higher in Asia

SINGAPORE, Feb 10, 2009 (AFP) - Oil traded higher in Asia on Tuesday but the New York benchmark stayed below 40 dollars as dealers said there was little prospect of a near-term price recovery.

New York's main oil futures contract, light sweet crude for delivery in March, rose 18 cents to 39.74 dollars per barrel. Brent North Sea crude for March rose nine cents to 46.11 dollars a barrel.

"I think prices will trade lower in the next week or so ... due to demand weakness," said Jonathan Kornafel, Asia director of Hudson Capital Energy, a trading firm.

Prices had risen on Monday after the Organisation of the Petroleum Exporting Countries (OPEC) said its members have shelved 35 oil drilling projects indefinitely until prices recover.

OPEC nations pump about 40 percent of the roughly 86 million barrels of oil consumed globally every day, but in recent months cartel members have seen oil revenues fall as the global economic slowdown hits demand.

The cartel announced production cuts totalling 4.2 million barrels per day late last year and recently signalled it would consider further reductions in a bid to bolster prices.

"While cutting production may be supporting prices now, with winter almost over, it is unclear that OPEC can cut enough to stop another oil price market crash," said Phil Flynn, an analyst at Alaron Trading Corp.

Source: AFP

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