Oil rises above $83 as global stock markets extend rally
Thursday, 7 October 2010
SINGAPORE, Oct 6 (AP): Oil prices rose above US$83 a barrel Wednesday in Asia amid rising global stock markets and a weakening US dollar.
Benchmark oil for November delivery was up 30 cents to $83.12 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained $1.35 to settle at $82.82 Tuesday.
Oil prices broke out of a year-long $70 to $80 trading range last week as global stocks rallied and the US dollar fell. Crude traders often look to stock markets as a measure of overall investor sentiment while oil becomes cheaper for investors with foreign currencies when the dollar drops.
Most Asian and European stock markets rose Wednesday while the euro gained to $1.3856 from $1.3832 Tuesday. The dollar fell to 83.04 yen from 83.25 yen.
"We look for the euro to be the primary price driver behind upcoming swings in the value of oil," Ritterbusch and Associates said in a report. "Additional oil price gains would appear highly likely."
A report showed US crude supplies unexpectedly jumped last week - suggesting demand may be weaker than anticipated - weighed on crude prices.
The American Petroleum Institute said late Tuesday that crude inventories rose 4.4 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos, had forecast a drop of 1.3 million barrels.
Inventories of gasoline and distillates fell, the API said.
The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.
Benchmark oil for November delivery was up 30 cents to $83.12 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained $1.35 to settle at $82.82 Tuesday.
Oil prices broke out of a year-long $70 to $80 trading range last week as global stocks rallied and the US dollar fell. Crude traders often look to stock markets as a measure of overall investor sentiment while oil becomes cheaper for investors with foreign currencies when the dollar drops.
Most Asian and European stock markets rose Wednesday while the euro gained to $1.3856 from $1.3832 Tuesday. The dollar fell to 83.04 yen from 83.25 yen.
"We look for the euro to be the primary price driver behind upcoming swings in the value of oil," Ritterbusch and Associates said in a report. "Additional oil price gains would appear highly likely."
A report showed US crude supplies unexpectedly jumped last week - suggesting demand may be weaker than anticipated - weighed on crude prices.
The American Petroleum Institute said late Tuesday that crude inventories rose 4.4 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos, had forecast a drop of 1.3 million barrels.
Inventories of gasoline and distillates fell, the API said.
The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.