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Oil remains above US$89 a barrel on Europe cold snap
Source: Agencies |
December 7, 2010, Tuesday
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OIL prices remained above US$89 a barrel yesterday after rallying to a 26-month high last week, fueled by hopes of increased demand amid a cold snap in Europe and rising speculative interest.
By early afternoon in Europe, benchmark oil for January delivery was up 11 cents to US$89.30 a barrel in electronic trading on the New York Mercantile Exchange. The contract added US$1.19 to settle at US$89.19 on Friday, the second time in less than a month that oil has reached the level where it was in the fall of 2008.
Prices were kept in check by a stronger dollar, which makes crude more expensive for investors holding other currencies.
Hit by the debt crisis affecting several members of the European Union, the euro fell to US$1.3291 yesterday from US$1.3387 late Friday in New York, while the British pound was down to US$1.5679 from US$1.5741.
There are widespread expectations that the price will hit US$90 a barrel by year's end and head toward US$100 a barrel by next spring, when traders begin looking ahead to the summer driving season.
"There is generally rather bullish sentiment in the oil market," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "The US$90 level is now becoming a magnet. The bulls in the market will try to push it across US$90 but the question is, can it be sustained?"
In other Nymex trading in January contracts, heating oil lost 0.7 cent to US$2.4804 a gallon, gasoline added 0.14 cent to US$2.3535 a gallon and natural gas gained 6 cents to US$4.409 per 1,000 cubic feet.
In London, Brent crude added 19 cents to US$91.61 a barrel on the ICE futures exchange.
By early afternoon in Europe, benchmark oil for January delivery was up 11 cents to US$89.30 a barrel in electronic trading on the New York Mercantile Exchange. The contract added US$1.19 to settle at US$89.19 on Friday, the second time in less than a month that oil has reached the level where it was in the fall of 2008.
Prices were kept in check by a stronger dollar, which makes crude more expensive for investors holding other currencies.
Hit by the debt crisis affecting several members of the European Union, the euro fell to US$1.3291 yesterday from US$1.3387 late Friday in New York, while the British pound was down to US$1.5679 from US$1.5741.
There are widespread expectations that the price will hit US$90 a barrel by year's end and head toward US$100 a barrel by next spring, when traders begin looking ahead to the summer driving season.
"There is generally rather bullish sentiment in the oil market," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "The US$90 level is now becoming a magnet. The bulls in the market will try to push it across US$90 but the question is, can it be sustained?"
In other Nymex trading in January contracts, heating oil lost 0.7 cent to US$2.4804 a gallon, gasoline added 0.14 cent to US$2.3535 a gallon and natural gas gained 6 cents to US$4.409 per 1,000 cubic feet.
In London, Brent crude added 19 cents to US$91.61 a barrel on the ICE futures exchange.
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