Oil down in Asian trade

October 22, 2009 03:49:51 PM

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Oil eased in Asian trade Thursday after surging to 82 dollars, its highest level in a year as investor sentiment received a boost from a decline in US energy reserves, analysts said.

New York's main contract -- light sweet crude for December delivery -- sank 11 cents to 81.26 dollars a barrel. The contract hit 82 dollars in Wednesday trade, its highest level since October 2008.

Brent North Sea crude December delivery eased two cents to 79.67 dollars a barrel.

Both contracts had closed higher Wednesday, lifted by a drop in US energy stocks which were seen as a sign of improved demand in the world's biggest energy user.

Data released Wednesday by the Department of Energy showed US gasoline reserves sank by 2.3 million barrels in the week to October 16. That was more than the 800,000 barrel drop expected by most analysts.

Oil has been rising steadily in recent days, fuelled by a weak US currency which makes dollar-priced crude cheaper for holders of stronger foreign units.

But there are doubts on whether oil prices can be sustained at levels above 80 dollars given the fragile state of the global economy, despite some signs of a recovery.

"We remain cautious about the sustainability of the oil price in the near term," analysts from the Commonwealth Bank of Australia said in a report.

Oil prices tumbled from historic highs of more than 147 dollars in July 2008 to about 32 dollars in December because of the global recession but have since risen on hopes of recovery.