Crude oil lower in Asian trade

Updated at: 1240 PST, Saturday, December 05, 2009

SINGAPORE: Crude oil futures were slightly lower in Asian trade Saturday, as high inventories continued to weigh amid doubts about global economic recovery. On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at $76.17 a barrel at 0650 GMT, down 29 cents in the Globex electronic session. January Brent crude on London's ICE Futures exchange fell 21 cents to $78.15 a barrel. "As far as today goes, all eyes will be on November's unemployment rate, which the crowd forecasts at unchanged, 10.2%," said Stephen Schork in The Schork Report. Recent data from the U.S. continued to reflect weak demand in the world's largest energy consumer, and a widening crude futures contango makes increased crude storage very likely. Normally, an expanding contango would drive outright crude values sharply lower, possibly into the $65-$70-a-barrel zone, but with supporting financial factors, "sustaining downside crude price moves in the face of aggressive hedge fund buying interest is proving to be an arduous process," said Jim Ritterbusch of Ritterbusch and Associates. The oil market was also pressured by the Institute for Supply Management report yesterday that said its service industry index for November fell to 48.7, from 50.6 in October, indicating a contraction in the industry--in contrast to an expansion predicted by economists.