Oil price retreats below 98 dollars
Friday, 23 November 2007
SINGAPORE, Nov 22 (AFP): Oil retreated below 98 US dollars in Asia trade today after rising to within striking distance of the symbolic 100-dollar level.
Dealers said investors were taking a cautious stance to protect their positions since US financial markets were closed today for the Thanksgiving holiday.
In early morning trade, New York's main contract light sweet crude for January delivery rose five cents to 97.34 dollars a barrel from 97.29 dollars in late US trades yesterday.
The contract had spiked to a new peak of 99.29 dollars on Wednesday to within touch of 100 dollars on continued concerns over tight global supplies, dealers said.
David Moore, a commodity strategist with the Commonwealth Bank of Australia, said he had expected prices to rise after latest US government data showed a decline in the country's crude reserves.
The US Department of Energy (DoE) announced yesterday that reserves of US crude oil had sunk by 1.1 million barrels in the week ending November 16. Analysts' consensus forecast had been for a gain of 750,000 barrels.
Heating fuel demand is expected to pick up as the northern hemisphere winter kicks in next month and the US northeast region is the world's biggest user of heating oil.
Crude oil prices have surged by about 64 per cent since the start of 2007, energised by supply disruptions in key producers such as Nigeria, geopolitical jitters over the Iranian nuclear crisis, and strong demand from China and India.
Oil prices were also winning support from a troubled dollar, which Wednesday dived to a fresh record low point against the euro.
The European single currency surged to a historic high this week of 1.4855 dollars, as the US currency was hit by renewed worries about the outlook for the American economy, analysts said.
A weak dollar encourages demand for commodities like oil, which are priced in the greenback, because they become more attractive to investors using stronger currencies.
Dealers said investors were taking a cautious stance to protect their positions since US financial markets were closed today for the Thanksgiving holiday.
In early morning trade, New York's main contract light sweet crude for January delivery rose five cents to 97.34 dollars a barrel from 97.29 dollars in late US trades yesterday.
The contract had spiked to a new peak of 99.29 dollars on Wednesday to within touch of 100 dollars on continued concerns over tight global supplies, dealers said.
David Moore, a commodity strategist with the Commonwealth Bank of Australia, said he had expected prices to rise after latest US government data showed a decline in the country's crude reserves.
The US Department of Energy (DoE) announced yesterday that reserves of US crude oil had sunk by 1.1 million barrels in the week ending November 16. Analysts' consensus forecast had been for a gain of 750,000 barrels.
Heating fuel demand is expected to pick up as the northern hemisphere winter kicks in next month and the US northeast region is the world's biggest user of heating oil.
Crude oil prices have surged by about 64 per cent since the start of 2007, energised by supply disruptions in key producers such as Nigeria, geopolitical jitters over the Iranian nuclear crisis, and strong demand from China and India.
Oil prices were also winning support from a troubled dollar, which Wednesday dived to a fresh record low point against the euro.
The European single currency surged to a historic high this week of 1.4855 dollars, as the US currency was hit by renewed worries about the outlook for the American economy, analysts said.
A weak dollar encourages demand for commodities like oil, which are priced in the greenback, because they become more attractive to investors using stronger currencies.