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Oil rises to near US$89 amid light holiday trading
Source: Agencies |
December 21, 2010, Tuesday
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OIL prices climbed yesterday, as China's thirst for energy showed little sign of being quenched.
Platts, the energy information arm of McGraw-Gill, said China's oil demand in November hit an all-time high of 9.3 million barrels per day.
Benchmark oil for January delivery rose 79 cents to settle at US$88.81 a barrel on the New York Mercantile Exchange. Since the contract expired Monday, many traders shifted their focus to the February contract, where the price rose 77 cents to settle at US$89.37 a barrel.
Traders also are monitoring the stock markets for clues about where the global economy may be headed in the New Year. Stocks wavered between small gains and losses yesterday. The Dow Jones Industrial Average closed down about 14 points. The NASDAQ and the S&P 500 were a little higher.
Many oil traders are taking the next two weeks off amid the year-end holidays. Global crude markets are closed Friday for Christmas.
Analysts are mulling whether this year's strong global oil demand can carry over into 2011. Emerging markets, led by China, have accounted for most of the growth in oil consumption this year as the U.S. and Europe slowly recover from recession.
"The positive demand shock has continued relentlessly," Barclays Capital said in a report. Prices will likely rise "given the strength in underlying fundamentals and with macroeconomic sentiment continuing to improve."
Barclays said it expects crude to average US$91 a barrel next year.
Morgan Stanley, which is forecasting that oil will average US$100 in 2011, said higher commodity prices could fuel inflation and undermine economic growth.
"If developed world growth accelerates next year, commodity prices, particularly oil, could become a headwind for growth, lift inflation, and prompt policy tightening, particularly in emerging market economies," Morgan Stanley said in a report.
In other Nymex trading in January contracts, heating oil added 1.58 cents to settle at US$2.4895 a gallon, gasoline futures gained 6 cents to settle at US$2.3778 a gallon and natural gas gained 17.1 cents to settle at US$4.129 per 1,000 cubic feet.
In London, Brent crude rose US$1.07 to settle at US$92.74 a barrel on the ICE Futures exchange.
Platts, the energy information arm of McGraw-Gill, said China's oil demand in November hit an all-time high of 9.3 million barrels per day.
Benchmark oil for January delivery rose 79 cents to settle at US$88.81 a barrel on the New York Mercantile Exchange. Since the contract expired Monday, many traders shifted their focus to the February contract, where the price rose 77 cents to settle at US$89.37 a barrel.
Traders also are monitoring the stock markets for clues about where the global economy may be headed in the New Year. Stocks wavered between small gains and losses yesterday. The Dow Jones Industrial Average closed down about 14 points. The NASDAQ and the S&P 500 were a little higher.
Many oil traders are taking the next two weeks off amid the year-end holidays. Global crude markets are closed Friday for Christmas.
Analysts are mulling whether this year's strong global oil demand can carry over into 2011. Emerging markets, led by China, have accounted for most of the growth in oil consumption this year as the U.S. and Europe slowly recover from recession.
"The positive demand shock has continued relentlessly," Barclays Capital said in a report. Prices will likely rise "given the strength in underlying fundamentals and with macroeconomic sentiment continuing to improve."
Barclays said it expects crude to average US$91 a barrel next year.
Morgan Stanley, which is forecasting that oil will average US$100 in 2011, said higher commodity prices could fuel inflation and undermine economic growth.
"If developed world growth accelerates next year, commodity prices, particularly oil, could become a headwind for growth, lift inflation, and prompt policy tightening, particularly in emerging market economies," Morgan Stanley said in a report.
In other Nymex trading in January contracts, heating oil added 1.58 cents to settle at US$2.4895 a gallon, gasoline futures gained 6 cents to settle at US$2.3778 a gallon and natural gas gained 17.1 cents to settle at US$4.129 per 1,000 cubic feet.
In London, Brent crude rose US$1.07 to settle at US$92.74 a barrel on the ICE Futures exchange.
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