WSJ:OIL FUTURES: Crude Rises In Asia On Upbeat Korea, Japan Industrial Output
By Ga-Woon Philip Vahn
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Crude-oil futures rose Wednesday in Asia, staging a rebound after two consecutive days of price declines amid renewed confidence in industrial activity in the region.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $107.04 a barrel at 0741 GMT, up $0.49 in the Globex electronic session. April Brent crude on London's ICE Futures exchange rose $0.84 to $122.39 a barrel.
Seasonal factors such as the end of winter and maintenance season for major refineries could weigh on physical demand in the second quarter, but portfolio managers are keen to hold on to long positions as macroeconomic headlines continue to point to gradual global economic recovery, market participants said.
Data Wednesday showed Japan's January industrial output rose 2.0% from the previous month, stronger than a 1.5% increase predicted in a median forecast of economists surveyed by Dow Jones Newswires. And South Korea's January industrial production unexpectedly reversed three months of declines to rise a modest 3.3%.
"The European crisis is far from over but signs are quite positive for the U.S., while Asian economies continue to show resilience," a sales manager at GS Caltex in Seoul said.
The geopolitical risk premium is unlikely to persist in the longer term and the crude market will eventually find its balance, the manager said.
"Current price levels don't reflect global economic fundamentals as there is too much speculation over Iranian supply issues. I don't expect a full-blown military conflict between Tehran and the West, and strong physical demand will emerge once prices stabilize from current overbought conditions."
The Schork Group said in a note that consumers are willing to absorb higher prices at the pump in the short term, but sustained high prices will lead to a collapse in consumer confidence this year, just as they did last year.
Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--fell 16 points to $3.0385 a gallon, while March heating oil traded at $3.2490, 252 points higher.
ICE gasoil for March changed hands at $1,017.25 a metric ton, down $5.00 from Tuesday's settlement.
-By Ga-Woon Philip Vahn, Dow Jones Newswires; +65-64154149; philip.vahn@dowjones.com
