Oil prices rose slightly to above USD 41 a barrel on Wednesday in Asia despite dismal economic news that pointed to deteriorating crude demand.
Light, sweet crude for March delivery was up 37 cents at USD 41.21 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract fell USD 1.53 overnight to settle at USD 40.84.
The February contract, which expired Tuesday, rose USD 2.23 to settle at USD 38.74 a barrel.
Bad news from the banking sector left investors concerned that a deepening global slowdown will further undermine demand for crude. Royal Bank of Scotland said Tuesday its losses for last year could top USD 41 billion, which would be the biggest loss ever for a British corporation.
The British government injected more money into the struggling bank Monday and announced plans for another round of bailouts for the country's banks.
US banks State Street and Regions Financial Corp. also reported big earnings drops on Tuesday.
The Dow Jones industrial index, which oil traders look to as a barometer of investor sentiment about the economy, fell 4 per cent on Tuesday.
"It's really getting ugly on the economic side," said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "There is nothing to support crude in the fundamentals."
The deteriorating global economic outlook means forecasts for crude demand are being slashed
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