Oil prices dip in afternoon Asian trade

Saturday, 20 November 2010 00:01 - - {{hitsCtrl.values.hits}}

SINGAPORE, (AFP) - Oil prices turned lower in Asian trade Friday as uncertainty over possible Chinese price controls on energy products aimed at curbing soaring inflation worried investors, analysts said.

New York’s main contract, light sweet crude for December delivery, was down nine cents at 81.76 dollars per barrel in its last trading day.

Brent North Sea crude for January fell 18 cents to 84.87 dollars.

Fears of possible Chinese price controls on energy products in order to tamp down growing inflation were spooking the market, said Jason Feer, Asia-Pacific vice-president of Argus Media energy analysts in Singapore.

“Uncertainty related to the price controls from China... adds a layer of uncertainty that wasn’t there before.”The Chinese government on Wednesday announced guidelines aimed at ensuring stable prices and supplies of key products such as vegetables, grain, coal and other energy sources to control inflation.

However, the government statement offered few specifics and did not say that price caps would be imposed on any products, leaving investors on tenterhooks, Feer said. Inflation fears are always a concern to Chinese officials due to the potential for price rises to spark unrest. Such fears have been further fuelled by the US Federal Reserve’s decision to pump money into the American economy.