By ALEX KENNEDY / AP WRITER
SINGAPORE — Oil slipped below US $52 a barrel Friday in Asia after surging overnight on investor optimism crude demand will soon rebound if the US recession has bottomed.
Benchmark crude for May delivery fell 72 cents to $51.92 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract rose $4.25 on Thursday to settle at $52.64.
Oil prices have bolted from below $35 a barrel six weeks ago, riding a wave of improving investor sentiment that the worst of the US recession may be over. Crude prices have mirrored a surge in stock markets, with the Dow Jones industrial average up more than 20 percent during the last month.
“At this point, it’s more momentum than fundamentals,” said Gerard Rigby, energy analyst with Fuel First Consulting in Sydney. “People are expecting oil to jump over the next 12 to 24 months.”
Investors brushed off evidence this week that US crude inventories are at a 16-year high.
Crude inventories grew by 2.8 million barrels, or 0.8 percent, for the week ended March 27, the Energy Department’s Energy Information Administration said in its weekly report on Wednesday. Oil stockpiles have not been this high since July 1993 and are 15.5 percent above levels one year ago.
Investors will be closely watching the US jobs report for March, which is scheduled to be released later Friday. Economists predict the report will show a loss of 654,000 jobs following a drop of 651,000 jobs in February, which was a record third straight month of job losses above 600,000. The unemployment rate is expected to rise to 8.5 percent from 8.1 percent in February.
“If the unemployment rate in the US goes up a lot, it would definitely put the brakes on the recent price increase,” Rigby said.
In other Nymex trading, gasoline for May delivery fell 1.98 cents to $1.45 a gallon and heating oil slipped 1.55 cents to $1.42 a gallon.
Natural gas for May delivery rose 2.3 cents to $3.81 per 1,000 cubic feet.
In London, Brent prices rose 60 cents to $52.15 a barrel on the ICE Futures exchange.