February 20, 2008
SINGAPORE (Reuters) - Oil rose on Tuesday, as the market grappled with worries over an economic slowdown in the United States and supply concerns from Venezuela and Nigeria.
London Brent crude (LCOc1) rose 34 cents to $95.25 a barrel by 2:35 a.m. EST, while U.S. crude (CLc1) was up 22 cents at $96.33 on the Globex electronic trading platform, from $96.11 at 1:12 p.m. EST the previous day.
The New York Mercantile Exchange was closed on Monday because of a U.S. national holiday.
A row between OPEC-member Venezuela and oil major Exxon Mobil Corp (XOM.N), and fears of new supply disruptions from Nigeria lifted oil to its fifth-straight day of gains on Tuesday.
But analysts said lingering concerns over a possible recession in the United States, the world's top oil consumer, would weigh down prices this week.
"Price should be choppy to lower this week, although sentiment remains mixed on OPEC and Venezuelan oil cutbacks versus a U.S. recession," Mark Pervan, senior commodity strategist at ANZ Research, said in a note.
Economic data from the United States last week showed that the mood of American consumers deteriorated in February to a point that could signal a recession.
U.S. data also suggested bubbling price pressures, raising the possibility of stagflation -- simultaneously slowing growth and rising inflation.
This week will see the release of U.S. consumer inflation data and housing starts on Wednesday. (ECONUS)
"Economic worries or no, oil prices were due for a correction which we believe is underway despite the recent move back above $90 a barrel," JPMorgan analyst Katherine Spector said in a research note.
Venezuelan President Hugo Chavez said on Sunday the state could sue Exxon Mobil for unpaid oil taxes, but a senior executive told Reuters on Monday that the company was ready to talk to the government to settle the dispute.
Venezuela, one of the largest crude exporters to the United States, cut shipments to Exxon Mobil last week after the firm won a $12 billion freeze of Venezuelan assets to ensure compensation for an oil project Chavez nationalized last year.
Oil producers in the Middle East had assured the United States that they could compensate for a supply disruption if Venezuela slows exports.
Top world oil exporter Saudi Arabia was confident that it will reach a target to raise crude oil output capacity, a top executive from the country's state oil firm said on Monday.
(Reporting by Chua Baizhen; Editing by Ramthan Hussain)