Oil prices were up in Asian trade today but the weak US economy weighed on the mood after a clutch of central banks moved to prevent a further escalation of the euro zone debt crisis.
New York's main contract, light sweet crude for delivery in October, was up five cents to $89.45 and Brent North Sea crude for October settlement climbed 14 cents to $112.44.
In a move aimed at preventing financial contagion, five of the world's most powerful central banks agreed yesterday to act in concert to lend US dollars to banks facing a shortage of the American currency.
The European Central Bank said it would, in line with the central banks of the US, Britain, Japan and Switzerland, provide three-month dollar loans to European banks.
The banks have run into serious problems in borrowing dollars recently because the US funds that normally lend to them have become reluctant to do so for fear of contagion from the euro zone debt crisis. The combination of the debt crisis and liquidity squeeze threaten to turn into a credit crunch according to some bankers.
Analysts said, however, that weak economic figures from US, the world's largest economy and oil consumer, were limiting price gains in the oil market.
US jobless claims surged last week to 428,000, underscoring the continued weakness in the jobs market, the US Labor Department said yesterday. New claims for unemployment insurance rose in the week to September 10 by 11,000 from the previous week's adjusted figure.
In addition, US inflation in August eased slightly from the previous month, but rising petrol and food prices still hit consumers hard.
