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SINGAPORE, Dec 15, 2010 (AFP)
Oil was lower in Asian trade Wednesday ahead of the release of a widely monitored US energy report, analysts said.

New York’s main contract, light sweet crude for January delivery, dropped 19 cents to 88.09 dollars a barrel and Brent North Sea crude, also for January delivery, eased 21 cents to 91 dollars.

An expected drop in US energy reserves, regarded as an indicator that demand has improved, should cap the price decline, analysts said.

Also, the cold spell in the northern hemisphere and OPEC’s decision to keep output levels at existing quotas should lend support to prices in the long term, they said.

“Oil prices look firm at current levels supported by strong demand, the OPEC meeting outcome, cold weather, and inventory dynamics,” Barclays Capital analysts said in a report.

“Moreover, with OPEC producers showing little intent at dampening prices at current levels, rather, expressing surprising ease with current proceedings, the downside from current levels appear minimal to us.”

The US Department of Energy will release later Wednesday its weekly figures on oil stocks, which analysts expect to show a sharp drop in crude reserves mainly due to particularly cold weather that has hit the country’s northeast.

The US Federal Reserve’s decision to maintain record-low interest rates and its massive asset purchasing policy had limited impact on the crude market, analysts said.

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