Holidays stifle oil trading

SINGAPORE - Oil prices hovered above US$74 a barrel yesterday as investors looked for signs of improving global crude demand amid light holiday trading.

Benchmark crude for March delivery was up 9c at US$74.22 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

With markets closed in the US for the Presidents Day holiday, the contract last settled on Friday, falling US$1.15 to US$74.13.

Trading volume was light in Asia as markets in China, Hong Kong, Taiwan, South Korea, Singapore, and Malaysia were closed for the Lunar New Year holiday.

Oil has traded between US$69 a barrel and US$84 for the past few months as investors struggle to gauge global crude demand.

On Monday, Japan said its economy grew an annualised 4.6 per cent in the fourth quarter while China raised reserve requirements for banks last week in a bid to slow economic growth and avoid asset bubbles.

"There are some signs of improvement in OECD countries as a whole with strong Japanese growth data," Barclays Capital said in a report.

"Worries about softening in China's commodity demand are overblown."

In other Nymex trading in March contracts, petrol fell 0.47c to US$1.9248 a gallon.

"We would expect oil prices for the remainder of the year in the current range, perhaps with a slight upwards drift but no dramatic spikes," BP chief economist Christof Ruehl told Reuters.

In London, Brent crude rose 35c to US$72.86 on ICE futures.

- AP