22 July 2005, 10:38  Oil prices rebound in Asian trade in choppy trading

Oil prices rebounded in Asian trade after tumbling nearly a dollar in the US overnight, marginally boosted by China's decision to scrap its decade-old peg to the dollar, dealers said. At 12.45 pm (0445 GMT), New York's main contract, light sweet crude for delivery in September, was at 57.44 usd a barrel, up 31 cents from its close of 57.13 usd overnight. Oil prices slipped 89 cents on Thursday following news a hurricane in the Gulf Of Mexico had died down without causing major damage to production in the region, assuring traders of adequate crude supplies. "The market is rebounding from a rather sharp fall in New York yesterday. The correction really is part of the choppiness of the oil market," said Victor Shum, an analyst with US energy consultancy firm Purvin and Gertz in Singapore. Shum, while conceding that the latest prices had factored in the revaluation of the yuan, shrugged off concerns that it could have a long-term impact on China's domestic oil consumption. "The market sentiment is that short-term, yes it may get easier for Chinese refiners to raise imports, therefore potentially driving up crude prices," he said. "But the reality is that (it) is so far is a symbolic gesture," he said, referring to China's announcement on Thursday to fix the yuan at 8.11 to the dollar compared with the old rate of 8.2765, with a trading range of 0.3 pct on either side. "The typical Chinese process of managing their economy is gradual... it'll be difficult to expect if and when the next revaluation would happen." Peter Luxton, at Informa Global Markets, said recent data -- showing the Chinese economy grew faster than expected during the first half of the year -- was of more consequence. "The Chinese growth figure is still high at 9.5 pct, above the expectations of 9.3 pct. There will be no effect on the buying power of the Chinese for crude oil," he said. The economy of China -- the second biggest global oil consumer after the United States -- grew at 9.5 pct during the second quarter, compared with 9.4 pct in the first three months of the year.

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