Published: Wednesday October 14, 2009 MYT 7:54:00 AM
Updated: Wednesday October 14, 2009 MYT 1:26:49 PM

Oil at 1-year high above U$75 a barrel Wed(update)

SINGAPORE: Oil prices jumped above US$75 a barrel Wednesday in Asia for the first time in a year on investor optimism crude demand will improve ahead of the Christmas shopping season.

Benchmark crude for November delivery was up 91 cents to $75.06, the highest since October 2008, by midday Singapore time in electronic trading on the New York Mercantile Exchange.

The contract gained 88 cents to settle at $74.15 on Tuesday.

Oil has traded between $65 and $75 since May as traders have mulled mixed crude supply and demand data.

Some analysts expect an increase in diesel fuel demand from U.S. truckers supplying inventory for the year-end holiday shopping season will trigger a sustained rise above $75.

"We believe oil prices are poised to move higher," Goldman Sachs, which expects prices to rise to $85 a barrel by the end of the year, said in a report.

"All indicators still point to a normal seasonal pick-up in shipping to retailers this year."

A weak dollar is also bolstering crude prices. The euro rose to $1.4886, the highest since August 2008, in early Asian trading from $1.4852 the previous day while the dollar slid to 89.00 yen from 89.69.

Burgeoning oil supplies this year have weighed on oil prices.

Investors will be looking to the latest U.S. inventory data later on Wednesday and Thursday from the American Petroleum Institute and the Energy Information Administration.

"The problem is really that we have a lot of crude inventory," said Victor Shum, an analyst with consultancy Purvin & Gertz in Singapore.

"This supply overhang makes the price vulnerable to any bad economic news, which we still get from time to time."

"It's more likely the price will hang around $70."

In other Nymex trading, heating oil rose 1.53 cents to $1.94 a gallon.

Gasoline for November delivery gained 2.36 cents to $1.86 a gallon. Natural gas for November delivery jumped 4.5 cents to $4.63 per 1,000 cubic feet.

In London, Brent crude rose 84 cents to $73.25 on the ICE Futures exchange. - AP

Oil prices near a new high for the year

NEW YORK: Oil prices neared new highs for the year Tuesday as the dollar slipped against other major currencies, demonstrating how much the weakened U.S. currency can affect consumers globally.

The U.S. dollar index, where the U.S. currency is measured against other major currencies, hit a 14-month low Tuesday.

Because crude is bought and sold in dollars, it essentially becomes cheaper for international investors who have flooded into energy markets despite a big surplus of oil.

Energy experts expect the government will report Thursday that crude supplies are still growing.

That does not appear to be a deterrent for many investors because the dollar is so weak.

Benchmark crude for November delivery gained 88 cents to settle at $74.15 on the New York Mercantile Exchange.

At one point, prices reached $74.47, just short of the $75 reached on Aug. 25, when the driving season was still in full swing.

Prices have now risen for four straight days and a barrel costs 4 percent more than it did one week ago.

Natural gas, which is not sold only in dollars, tumbled 29.2 cents, nearly 6 percent, to $4.588 per 1,000 cubic feet on Nymex.

On Tuesday, OPEC said China and other developing countries would push global oil demand up slightly next year, but added that any recovery would be "slow and weak."

The Organization of Petroleum Exporting Countries supplies over 35 percent of the world's crude.

Iraq's oil minister said Tuesday that three international oil producers have accepted the country's terms to develop two fields and submitted revised offers, a major breakthrough for Iraq's oil industry.

The country's first postwar bidding round flopped June 30 after most oil companies rejected terms from the Iraqi government.

Only one contract was awarded out of the eight oil and gas fields offered.

In other Nymex trading, heating oil rose almost 3 cents to settle at $1.9234 a gallon, and gasoline for November delivery gained about 3.3 cents to settle at $1.8318 a gallon.

In London, Brent crude rose $1.04 to settle at $72.40 on the ICE Futures exchange. - AP

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