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Oil prices head higher after OPEC meeting
Source: Agencies |
December 14, 2010, Tuesday
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OIL resumed its march to US$90 a barrel on Monday after OPEC left its crude output quotas unchanged, citing slowing demand and abundant supplies.
Benchmark crude for January delivery rose 82 cents to settle at US$88.61 per barrel on the New York Mercantile Exchange.
Oil prices bounced back following OPEC's weekend meeting in Ecuador, where oil ministers said they would keep production quotas unchanged. Even though that was expected, oil traders were glad to have it confirmed. "The market is focusing ... on the lack of desire to add more oil to quash higher prices," JP Morgan analysts said in a note to investors.
While higher oil prices put more money in OPEC pockets, oil-producing countries worry that prices could go too high, fan inflation and slow the global economic recovery. "The ministers generally love existing prices," energy consultants Cameron Hanover said in a report. "Some insiders have hinted at a quota increase if crude oil prices break above US$100 a barrel."
Oil prices were also helped yesterday by a weaker dollar. Oil and other commodities are priced in dollars, so they become more attractive to buyers with foreign currency as the dollar retreats.
The energy markets are watching the Senate vote on extending tax cuts. The bill would also extend unemployment benefits and reduce Social Security payroll taxes for a year, all of which are seen helping the economic recovery. As the economy recovers, demand for oil and gas is expected to improve as well.
In other Nymex trading, heating oil added 0.77 cent to settle at US$2.4652 a gallon. Gasoline gained 0.91 cent to settle at US$2.3184 a gallon. Natural gas picked up 0.3 cent to settle at US$4.420 per 1,000 cubic feet.
In London, Brent crude rose 71 cents to settle at US$91.19 per barrel.
Benchmark crude for January delivery rose 82 cents to settle at US$88.61 per barrel on the New York Mercantile Exchange.
Oil prices bounced back following OPEC's weekend meeting in Ecuador, where oil ministers said they would keep production quotas unchanged. Even though that was expected, oil traders were glad to have it confirmed. "The market is focusing ... on the lack of desire to add more oil to quash higher prices," JP Morgan analysts said in a note to investors.
While higher oil prices put more money in OPEC pockets, oil-producing countries worry that prices could go too high, fan inflation and slow the global economic recovery. "The ministers generally love existing prices," energy consultants Cameron Hanover said in a report. "Some insiders have hinted at a quota increase if crude oil prices break above US$100 a barrel."
Oil prices were also helped yesterday by a weaker dollar. Oil and other commodities are priced in dollars, so they become more attractive to buyers with foreign currency as the dollar retreats.
The energy markets are watching the Senate vote on extending tax cuts. The bill would also extend unemployment benefits and reduce Social Security payroll taxes for a year, all of which are seen helping the economic recovery. As the economy recovers, demand for oil and gas is expected to improve as well.
In other Nymex trading, heating oil added 0.77 cent to settle at US$2.4652 a gallon. Gasoline gained 0.91 cent to settle at US$2.3184 a gallon. Natural gas picked up 0.3 cent to settle at US$4.420 per 1,000 cubic feet.
In London, Brent crude rose 71 cents to settle at US$91.19 per barrel.
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