Oil rises above $95 as dollar hits new low against euro

Oil rises above $95 as dollar hits new low against euro


Late afternoon

Oil prices recovered Tuesday, 20 November, from an early dip as the dollar hit a new low against the euro, making oil futures attractive to investors using other currencies.

The euro has been climbing steadily against the dollar since August amid fears for the health of the US economy, stoked by the subprime credit crisis.

In morning European trading the euro bought $1.4766, up from $1.4667 late Monday in New York. It hit its previous all-time high of $1.4752 on 9 November.

Light, sweet crude for January delivery rose 96 cents to $95.60 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

In London, January Brent futures added 89 cents to $93.17 on the ICE Futures exchange.

Heating oil futures climbed 2.21 cents to $2.6263 a gallon (3.8 litres) while gasoline prices rose 2.34 cents to $2.4050 a gallon.

Natural gas futures fell 6.5 cents to $7.722 per 1,000 cubic feet. AP


Singapore: Oil prices were lower in Asian trade Tuesday, 20 November, with the dip seen as temporary because traders were still worried about tight global supplies, dealers said.

In early morning trade, New York’s main contract, light sweet crude for January delivery was 26 cents down at $94.38 a barrel from $94.64 in US trades Monday.

Brent North Sea crude for January delivery eased 33 cents to $91.95.

“Oil markets remain tight," analysts from the Commonwealth Bank of Australia said.

Opec’s decision not to increase its production following a rare meeting in Riyadh over the weekend with supplies tight ahead of the northern hemisphere winter season, dealers said.

“We can see no reason for Opec to change its strategy of maintaining tight crude stocks... Opec will keep crude supply fairly tight in 2008," said French banking giant Societe Generale.

The Organization of the Petroleum Exporting Countries (Opec) has been under pressure, in particular from the world’s biggest energy user the US, to increase supply to help cool prices.

However, Opec’s final declaration on Sunday after the meeting urged world peace to help stabilize prices and included a commitment to help fight global warming.

Opec, which pumps 40% of global crude supplies, last decided to raise output in September when the oil producers’s cartel agreed to provide an extra 500,000 barrels a day to the market, effective 1 November.

Societe Generale also expects prices to stay firm as geopolitical risks, which was a key factor behind the surge in prices to record levels, still remains.

“Geopolitical risk is also expected to support prices next year... premium will wax and wane as usual, depending on developments," the French banking giant said.

“Nigeria, Iran, Iraq and Saudi Arabia are the usual suspects, the latter due to the threat of terrorist action against oil facilities," it said. AFP