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Oil prices above US$85 for first time since Sept.
Source: Agencies |
October 11, 2011, Tuesday
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OIL prices jumped 3 percent yesterday as fears of another recession retreated.
Prices rose yesterday after France and Germany agreed to put more capital into European banks. The move by the eurozone's two biggest nations helped ease concerns that major banks in Europe and elsewhere would be brought down by the region's debt crisis.
Benchmark crude rose US$2.43, or 3 percent, to end the day at US$85.41 per barrel in New York. Brent crude, which is used to price many international kinds of oil, rose US$3.07 to finish at US$108.95 in London.
Economists had started to cut oil price and demand forecasts after the US and European economies stalled in the third quarter. Now actions by European leaders to prop up ailing banks and encouraging economic news in the US have brought oil prices back from 12-month lows.
Analysts say they're more confident that there won't be another recession, and that means world oil demand should continue to grow.
"Everyone had priced in a recession, and now we're realizing that, while the economy won't be growing that fast, it's still growing," PFGBest analyst Phil Flynn said.
Despite sluggish economic growth in the US and Europe, world oil demand is still expected to hit a record of about 88 million barrels per day this year. Demand is growing as China, India and other developing nations continue to expand.
Oil prices rose yesterday along with a broad rally on Wall Street. The Dow Jones industrial average, the Standard & Poor's 500 index and the Nasdaq composite index all rose around 3 percent.
Meanwhile, Royal Dutch Shell said it was forced to shut down one of its oil pipelines in Nigeria because of a leak and couldn't meet production goals. Nigeria is a major supplier of crude to the US
While the US may avoid another recession, rising oil prices could keep retail gasoline prices from sinking as low as some thought they might this year. Pump prices have been falling almost every day since the first week of September. They leveled off on yesterday at a national average of US$3.395 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has dropped an average of 27 cents since Sept. 5. It's still about 59 cents higher than a year ago.
In other energy trading, heating oil rose 4.51 cents to end at US$2.9039 per gallon and gasoline futures rose 4.77 cents to finish at US$2.6953 per gallon. Natural gas futures rose by 6 cents to end at US$3.541 per 1,000 cubic feet.
Prices rose yesterday after France and Germany agreed to put more capital into European banks. The move by the eurozone's two biggest nations helped ease concerns that major banks in Europe and elsewhere would be brought down by the region's debt crisis.
Benchmark crude rose US$2.43, or 3 percent, to end the day at US$85.41 per barrel in New York. Brent crude, which is used to price many international kinds of oil, rose US$3.07 to finish at US$108.95 in London.
Economists had started to cut oil price and demand forecasts after the US and European economies stalled in the third quarter. Now actions by European leaders to prop up ailing banks and encouraging economic news in the US have brought oil prices back from 12-month lows.
Analysts say they're more confident that there won't be another recession, and that means world oil demand should continue to grow.
"Everyone had priced in a recession, and now we're realizing that, while the economy won't be growing that fast, it's still growing," PFGBest analyst Phil Flynn said.
Despite sluggish economic growth in the US and Europe, world oil demand is still expected to hit a record of about 88 million barrels per day this year. Demand is growing as China, India and other developing nations continue to expand.
Oil prices rose yesterday along with a broad rally on Wall Street. The Dow Jones industrial average, the Standard & Poor's 500 index and the Nasdaq composite index all rose around 3 percent.
Meanwhile, Royal Dutch Shell said it was forced to shut down one of its oil pipelines in Nigeria because of a leak and couldn't meet production goals. Nigeria is a major supplier of crude to the US
While the US may avoid another recession, rising oil prices could keep retail gasoline prices from sinking as low as some thought they might this year. Pump prices have been falling almost every day since the first week of September. They leveled off on yesterday at a national average of US$3.395 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has dropped an average of 27 cents since Sept. 5. It's still about 59 cents higher than a year ago.
In other energy trading, heating oil rose 4.51 cents to end at US$2.9039 per gallon and gasoline futures rose 4.77 cents to finish at US$2.6953 per gallon. Natural gas futures rose by 6 cents to end at US$3.541 per 1,000 cubic feet.
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