Oil Up in Asia, but Europe Woes Cap Gains

Oil prices edged higher in Asian trade Wednesday after heavy losses in New York but sentiment was dampened by renewed jitters over European debt and weak economic data from China, analysts said.

New York's main contract, West Texas Intermediate crude for delivery in May was up 29 cents to $101.31 per barrel while Brent North Sea crude for May gained 30 cents to $120.18 in the afternoon.

WTI had fallen $1.44 in New York while Brent had dived $2.79.

Nervousness over Europe's debt crisis returned to the market as yields on Spanish debt jumped amid rising doubt over its ability to stabilize its finances, analysts said.

"A sharp rise in Spanish and other peripheral European sovereign debt yields dented investor confidence," said Justin Harper, market strategist at IG Markets Singapore.

"Spain's 10-year yields are trading just below 6.0 percent, which isn't far off the 6.7 percent peak they hit last November as panic was rife over a Eurozone collapse."

Harper and other analysts said weak economic data from China was also keeping a lid on gains.

"Energy markets were hit hard by China's slowing imports, as it is the world's second biggest crude oil consumer," Harper said.

Phillip Futures said the March trade data "showed China's import growth fell below expectations, indicating tepid first-quarter demand".

China, the world's largest energy consumer, on Tuesday said it recorded a trade surplus of $5.35 billion for March, reversing a trade deficit of $31.48 billion for February.

However, it also said exports rose a relatively weak 8.9 percent, while imports were up just 5.3 percent, suggesting flagging domestic consumption in the country of 1.3 billion people.

Uncertainty over the outcome of upcoming talks between major crude producer Iran and world powers over Tehran's controversial nuclear program were also supporting prices.

"There is still some concern about the nuclear issue in Iran," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

"Despite the fact that talks have been confirmed for this weekend, there is uncertainty on the outcome and that is affecting the prices currently."

Source: Agence France Presse

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