Oil breaks losing streak at US$78
By Christopher Johnson |
January 19, 2010, Tuesday
|
Print Edition
Print Edition
OIL rallied above US$78 per barrel yesterday, snapping a five-day losing streak as the United States dollar eased against a basket of currencies, but concern over the outlook for energy demand and economic recovery weighed on the market.
Oil prices began last week above US$80, supported by colder winter weather in the northern hemisphere and an influx of fresh funds capital looking to invest in commodities this year.
But poor company and banking results, concerns about prospects for the macro economy and oil demand, as well as rising temperatures in Europe and the United States had pulled prices lower for five working days straight.
US crude for February delivery was up 34 cents at US$78.34 a barrel by 10:53 GMT yesterday, after earlier touching a three-week intraday low of US$77.07. London Brent crude rose 18 US cents to US$77.29.
US markets were closed yesterday for a public holiday and volume was relatively light, traders said, suggesting the move upwards could be short-lived.
Christopher Bellew, broker at Bache Commodities in London, said many investors were worried about the state of oil demand.
"Funds are holding sizeable positions, the weather is warming in the northern hemisphere and there are concerns that there is ample supply and a fragile outlook for demand," Bellew said. "Momentum is the key to this market and it has gained downward momentum."
Eugen Weinberg, head of commodities analysis at Commerzbank in Frankfurt, agreed. "Market sentiment seems to have turned after prices failed to stay above US$80 per barrel."
The International Energy Agency said yesterday that the end of huge economic stimulus packages around the globe threatened a modest recovery in global oil demand this year.
Oil prices began last week above US$80, supported by colder winter weather in the northern hemisphere and an influx of fresh funds capital looking to invest in commodities this year.
But poor company and banking results, concerns about prospects for the macro economy and oil demand, as well as rising temperatures in Europe and the United States had pulled prices lower for five working days straight.
US crude for February delivery was up 34 cents at US$78.34 a barrel by 10:53 GMT yesterday, after earlier touching a three-week intraday low of US$77.07. London Brent crude rose 18 US cents to US$77.29.
US markets were closed yesterday for a public holiday and volume was relatively light, traders said, suggesting the move upwards could be short-lived.
Christopher Bellew, broker at Bache Commodities in London, said many investors were worried about the state of oil demand.
"Funds are holding sizeable positions, the weather is warming in the northern hemisphere and there are concerns that there is ample supply and a fragile outlook for demand," Bellew said. "Momentum is the key to this market and it has gained downward momentum."
Eugen Weinberg, head of commodities analysis at Commerzbank in Frankfurt, agreed. "Market sentiment seems to have turned after prices failed to stay above US$80 per barrel."
The International Energy Agency said yesterday that the end of huge economic stimulus packages around the globe threatened a modest recovery in global oil demand this year.
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