Oil price hovers near 18-month high
Wednesday, 7 April 2010
Oil prices continue to trade near 18-month highs, having touched $86.90 a barrel on Monday on growing hopes of a US-led global economic recovery, reports BBC.
One-month futures for US light crude futures on Tuesday are trading at $86.37, while Brent crude oil for May delivery is $85.50 a barrel.
At the same time, the US dollar has strengthened, making oil even more expensive for non-US buyers.
The US dollar climbed 0.4% against a basket of currencies.
Investors are buying dollars in the wake of positive economic data from the US.
On Monday, the Institute for Supply Management said the US services sector grew at its fastest in nearly four years in March.
At the same time, the National Association of Realtors said pending home sales rose by an unexpectedly strong 8.2% in February.
Last week, the Labor Department said employers had created 162,000 new jobs in March, the highest monthly number since March 2007.
However, the country's unemployment rate remained at 9.7% for the third month in a row.
The oil price has been gaining steadily since mid-February when it stood at $72, amid hopes of strong economic growth in both Asia and the US.
But oil prices are still a long way from the record highs above $147 a barrel that they reached in July 2008.
Investors will be watching for US inventory statistics due on Tuesday and on Wednesday.
The rising oil price means that there is likely to be more pain at the petrol pump for British drivers.
Motorists are already suffering from a weak pound, which has pushed up the price of oil in that currency, because it is priced in US dollars.
Another factor increasing petrol prices is the implementation of the "green" duty of 1p a litre added on 1 April and a further 1p to be added in October.
Figures from the AA last Wednesday, before the duty increase, said average petrol prices were at 118.07 a litre, with diesel at 118.67p.
The combination of tax and oil price rises is pushing average pump prices towards the record 119.7p reached in July 2008.
Meanwhile: Crude oil fell from its highest level in 17 months before a report forecast to show that crude inventories grew for a 10th week in the US, the world's largest energy consumer.
US gasoline stockpiles probably dropped 1.9 million barrels last week, while inventories of crude oil climbed 1 million barrels, according to a Bloomberg survey before tomorrow's Energy Department report. Oil rose 2.1 per centyesterday to $81.62 a barrel, the highest close since Oct. 8, 2008, as growth in US service industries signaled the economy is recovering from the worst recession since the 1930s.
One-month futures for US light crude futures on Tuesday are trading at $86.37, while Brent crude oil for May delivery is $85.50 a barrel.
At the same time, the US dollar has strengthened, making oil even more expensive for non-US buyers.
The US dollar climbed 0.4% against a basket of currencies.
Investors are buying dollars in the wake of positive economic data from the US.
On Monday, the Institute for Supply Management said the US services sector grew at its fastest in nearly four years in March.
At the same time, the National Association of Realtors said pending home sales rose by an unexpectedly strong 8.2% in February.
Last week, the Labor Department said employers had created 162,000 new jobs in March, the highest monthly number since March 2007.
However, the country's unemployment rate remained at 9.7% for the third month in a row.
The oil price has been gaining steadily since mid-February when it stood at $72, amid hopes of strong economic growth in both Asia and the US.
But oil prices are still a long way from the record highs above $147 a barrel that they reached in July 2008.
Investors will be watching for US inventory statistics due on Tuesday and on Wednesday.
The rising oil price means that there is likely to be more pain at the petrol pump for British drivers.
Motorists are already suffering from a weak pound, which has pushed up the price of oil in that currency, because it is priced in US dollars.
Another factor increasing petrol prices is the implementation of the "green" duty of 1p a litre added on 1 April and a further 1p to be added in October.
Figures from the AA last Wednesday, before the duty increase, said average petrol prices were at 118.07 a litre, with diesel at 118.67p.
The combination of tax and oil price rises is pushing average pump prices towards the record 119.7p reached in July 2008.
Meanwhile: Crude oil fell from its highest level in 17 months before a report forecast to show that crude inventories grew for a 10th week in the US, the world's largest energy consumer.
US gasoline stockpiles probably dropped 1.9 million barrels last week, while inventories of crude oil climbed 1 million barrels, according to a Bloomberg survey before tomorrow's Energy Department report. Oil rose 2.1 per centyesterday to $81.62 a barrel, the highest close since Oct. 8, 2008, as growth in US service industries signaled the economy is recovering from the worst recession since the 1930s.