Oil pushed up on Kuwait blast news
Oil climbed towards $123 a barrel today, rebounding after losses that were prompted by India and Malaysia's decisions to raise fuel costs and signs of weaker US consumption. Prices rose on a report of an explosion at a petrochemical facility at Kuwait's Mina Abdullah port.
State news agency Kuna, which carried the report, did not make clear if the blast affected Kuwait's nearby second largest oil refinery.
US crude was up 65 cents to $122.95 a barrel by 0844 GMT, having settled down $2.01 yesterday at $122.30, its lowest settlement in almost a month.
London Brent added 66 cents to $122.76.
Prices eased earlier, weighed by India and Malaysia's move yesterday to raise retail fuel prices. They joined a growing number of Asian nations no longer able to afford big subsidies in the face of record oil prices.
"Weaker demand is the main concern now," said Tetsu Emori, fund manager at Astmax in Tokyo.
"With domestic prices in these emerging countries now quite high, people will cut their consumption and that is a worry for the market."
India raised retail petrol and diesel fuel prices by about 10% and Malaysia hiked petrol prices by 41%. Taiwan, Sri Lanka and Indonesia reviewed their subsidies last month.
The latest weekly data on oil inventories in the United States added to the bearish sentiment as larger-than-expected rises in products stocks and falling gasoline demand, trumped a big drop in crude.
The US Energy Information Administration reported gasoline inventories rose 2.9 million barrels last week while gasoline demand over the past four weeks slumped 1.4% versus last year.
Also adding pressure, the US dollar inched up against the euro and other major currencies today, holding gains made the previous day after Federal Reserve chief Ben Bernanke emphasised inflation concerns.
A stronger dollar tends to make dollar-denominated commodities less attractive to investors.