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Oil prices stay above US$40 a barrel in Asia

Oil prices stay above US$40 a barrel in Asia

Oil prices remained above US$40 a barrel in Asian trade yesterday as Israel entered the fourth day of its military campaign against Hamas in the Gaza Strip.
At midday New York's main contract, light sweet crude for February delivery, rose US$0.26 to US$40.28 a barrel, following a US$2.31 rise to US$40.02 on Monday at the New York Mercantile Exchange.
Brent North Sea crude for February delivery was up US$0.05 to US$40.60 a barrel after closing US$2.18 higher at US$40.55 on Monday in London.
Prices were higher because of a "political risk premium" resulting from the Israeli-Hamas war but should drift lower on underlying weak demand for energy, said Jonathan Kornafel, Asia director of Hudson Capital Energy, a trading firm.
Israeli warplanes pounded Gaza again yesterday in what Tel Aviv called an "all-out" war on Hamas, which ended a ceasefire by firing rockets and mortars at the Jewish state.
The fighting fuelled fears of wider tensions in the oil-rich Middle East, traders said. Thin trade owing to the year-end holiday season also made for some price volatility.
Analysts said the price gains were additionally supported by evidence that the oil producers' cartel OPEC was cutting its output in line with an announcement earlier this month.
Previous OPEC production cuts have often been met with only partial compliance.


Updated : 2020-12-01 14:09 GMT+08:00