- The Washington Times - Monday, April 6, 2009

SINGAPORE (AP) - Oil prices rose above $53 a barrel Monday in Asia as investors looked to U.S. corporate earnings reports this week for signs of economic recovery that could sustain crude’s two-month rally.

Benchmark crude for May delivery rose 95 cents to $53.46 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract fell 13 cents on Friday to settle at $52.51.

Crude has jumped from below $35 a barrel in February as investor concerns have eased that the ailing U.S. economy would enter a depression and drag the rest of the world with it. Traders will be watching corporate earnings announcements for signs the recession may have bottomed in the first quarter and for company guidance about coming quarters.

Aluminum producer Alcoa Inc. is set to kick off first-quarter earnings season on Tuesday.

Still, some traders are skeptical whether oil demand that’s reeling from a global recession can justify much higher crude prices.

“The good feeling is hanging on, but I still think this is a bear-market rally,” said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. “I think crude is going to see some pretty firm resistance around $55, then go back down to the low $40s.”

Investors were cheered last week by the G-20 meeting in London, where leaders agreed to resist the lure of protectionism during the economic crisis. The nations also pledged more than $1 trillion to combat the global financial crisis.

“The underlying sentiment after this meeting was pretty positive,” Moltke-Leth said. “Compared to the depression of the 1930s, the international community is showing that it is committed to working together.”

Investors also brushed off a grim U.S. jobs report on Friday that showed the unemployment rate rose to 8.5 percent in March, a 25-year high.

Concerns that growth could remain weak for years _ as companies and individuals shed debt and credit remains tight _ will likely dampen oil prices this year, Moltke-Leth said.

“Until the credit market really loosens up, you wont see a long-term sustained rally in commodities,” Moltke-Leth said. “We may have to live with 2 to 2.5 percent growth.”

In other Nymex trading, gasoline for May delivery rose 2.16 cents to $1.51 a gallon and heating oil gained 1.31 cents to $1.46 a gallon. Natural gas for May delivery jumped 1.6 cents to $3.82 per 1,000 cubic feet.

In London, Brent prices rose 65 cents to $54.12 a barrel on the ICE Futures exchange.


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