Oil prices steady near $39 in Asia trading

Singapore: Oil prices were steady near $39 a barrel on Wednesday in Asia as investors digested more bad economic news from the US in thin Christmas Eve trading.

Light, sweet crude for February delivery dipped 9 cents to $38.89 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract fell overnight 93 cents to settle at $38.98.

A steady stream of dismal US economic and corporate news during the last few months has hammered investor confidence and sent oil prices reeling 74 per cent since July.

Investors will be watching for more evidence of slowing US demand in the weekly oil inventories report to be released on Wednesday by the US Energy Department's Energy Information Administration.

The report is expected to show that oil stocks rose 1.5 million barrels last week, according to the average of estimates in a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

The Platts survey also projects that gasoline inventories increased 900,000 barrels and distillates gained 1.4 million barrels last week.

Traders have so far brushed off attempts by Opec to boost prices through production cuts. The Organisation of Petroleum Exporting Countries, which accounts for about 40 per cent of global supply, said last week it would slash production by 2.2 million barrels a day, its largest cutback ever, adding to a 1.5 million output quotas reduction in November.