Reply #9: Oil prices rebound in Asian trading

[ozymandius]

SINGAPORE - Oil prices rebounded modestly in Asian trading Wednesday as traders bought contracts after they dropped sharply in the previous session.

Crude prices had declined sharply after the International Energy Agency cut its demand forecasts and said Tuesday that crude supplies are rising.

"Essentially, what the IEA indicated was that high crude prices were weighing down on oil demand," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "The news is seen as bearish for the market."

The IEA, an energy policy adviser to 26 predominantly Western industrialized nations, lowered its fourth-quarter oil demand forecasts by 500,000 barrels a day, and cut its demand forecasts for 2008 by 300,000 barrels a day. Year-over-year demand growth will now average 1.2 percent in 2007 and 2.3 percent in 2008, the IEA said.

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Whether Tuesday's sharp decline marks the beginning of the end of an oil bubble remains to be seen. Analysts say investors who still believe oil will rise above $100 will swoop in to "buy the dips" whenever oil prices fall.

http://news.yahoo.com/s/ap/oil_prices