Oil prices fell slightly in Asia on Tuesday, after earlier gains on hopes a US economic stimulus package.
Oil prices fell slightly in Asia on Tuesday, after earlier gains on hopes a US economic stimulus package and a bailout for the auto sector would nurse the world's biggest energy consumer back to health, dealers said. In afternoon trade New York's main futures contract, light sweet crude for January delivery, fell four cents to 43.67 dollars a barrel. The contract closed on Monday 2.90 dollars higher at 43.71. Brent North Sea crude for January delivery dropped 20 cents to 43.22 dollars after closing on Monday 3.68 dollars higher at 43.42 in London.
Both contracts were slightly higher in Asian morning trade.
Financial markets, including oil futures, soared after US President-elect Barack Obama promised at the weekend the biggest infrastructure investment in half a century, and Congress signalled a rescue of the Big Three US automakers.
"Global investors have apparently taken a significant degree of solace" from the moves, said John Kilduff, an analyst at MF Global.
But some analysts said the gains could be short-lived because energy demand in the immediate term is still soft, with the US and other industrialised economies stuck in a recession.
"Oil remains fundamentally weak. The downward trend is very much intact," commodity analysts from Societe Generale bank said in a report.
Investors will be watching OPEC meeting closely
Investors will be watching closely a December 17 OPEC meeting to be held in Oran, Algeria, where the oil cartel is widely expected to announce another round of production cuts to shore up slumping prices.
The Organisation of the Petroleum Exporting Countries (OPEC), which pumps about 40 percent of the world's crude, maintained existing output levels at its last meeting in November.
On Friday, Brent crude tumbled below 40 dollars after the US Labor Department reported that employers slashed 533,000 jobs in November, the biggest monthly decline in 34 years, and the unemployment rate rose to a 15-year high of 6.7 percent.
While a global economic slowdown weakens energy demand, oil prices have plunged by about 70 percent since reaching record highs above 147 dollars in July.