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Oil prices were higher in Asian trade today, lifted by buoyancy in regional stock markets but analysts said the spectre of another global recession was expected to limit gains.
New York’s main contract, West Texas Intermediate crude for delivery in September, was up 22 cents to $85.60 a barrel in morning trade.
Brent North Sea crude for September advanced 27 cents to $108.30.
“Asian stocks are gaining and so oil futures are rising in parallel to that,” said Mr Victor Shum, an analyst with Purvin and Gertz energy consultancy in Singapore.
“But I expect that the market will continue to be rocky and volatile because there’s still concern about a potential return of the global economy to a recession,” he told AFP.
“Traders will be wary and the wariness will limit any upside in the short term for crude.”
World Bank chief Mr Robert Zoellick said in Australia yesterday that investors had lost confidence in the economic leadership of several key countries and warned that global markets were in a “new danger zone” as a result.
Mr Zoellick said a convergence of events in the United States and Europe had rattled investors in countries already struggling to cap sovereign debt issues and unemployment.
“And what we’ve seen is that confidence is a fragile element of how the market economy works,” he said.
The Singapore Prime Minister, Mr Lee Hsien Loong, also said in a key policy speech Sunday that Asia, including China and India, would be vulnerable if the United States and Europe sank into another recession.
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