SINGAPORE: Oil prices were mixed in volatile Asian trade on Tuesday as optimism over energy demand at the start of the US driving season outweighed persistent eurozone concerns, analysts said.
New York's main contract, light sweet crude for delivery in July, gained 33 cents to 74.30 dollars a barrel while Brent North Sea crude for July was unchanged at 74.65 dollars. Crude prices were supported by expectations of higher crude use with the onset of the summer in the United States.
"After Memorial Day, the driving season in the US is starting, so there are expectations that people will be driving more this summer," said Serene Lim, a Singapore-based oil analyst with the ANZ bank. Analysts at the Commonwealth Bank of Australia added in a report Tuesday: "Increased vehicle movements, partly related to holiday travel, add to fuel demand.
We suspect that this year's driving season will be stronger." However, prices were weighed by data from the European Union Monday indicating a dip in business and consumer confidence, Lim said. "Economic confidence dropped and that had an impact on Brent prices," said Lim.
The European Commission's Economic Sentiment Indicator fell to 98.4 points in May across the 16 countries that share the euro currency, down from 100.6 points in April.
However, Lim said "prices are likely to consolidate at current levels". "I think the previous two weeks they have been oversold and we could see a brief technical rebound or a rally." Markets in New York were closed for Memorial Day holiday Monday, while London was also closed for a bank holiday.
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