Thursday, October 22, 2009
Crude oil spikes above 81 dollars
2:06 PM | 
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LONDON: World oil prices spiked Wednesday to a one-year peak above 81 dollars, as investors reacted to plunging US gasoline or petrol reserves, and the tumbling greenback, traders said.
New York's main contract, light sweet crude for December delivery, soared as high as 81.73 dollars per barrel -- last seen in October 2008.
Elsewhere on Wednesday, Brent North Sea crude for December delivery rallied to a similar peak at 79.98.
The US government's Department of Energy (DoE) announced Wednesday that American gasoline or petrol reserves sank 2.3 million barrels in the week to October 16.
That was far heavier than expectations of an 800,000-barrel drop, according to traders polled by Dow Jones Newswires.
Torbjorn Kjus, analyst at DnB NOR Markets, described the sharp gasoline drop as "bullish" -- indicating that it was likely to push oil prices higher.
The DoE's weekly report is a key focus for the market because the United States is the world's biggest energy consuming nation, followed by number two China.
The latest price peaks also came after the European single currency breached the key 1.50-dollar level to hit a 14-month peak, as many investors deserted the US unit in favour of higher yielding assets, dealers said.
The falling greenback makes dollar-priced oil cheaper for buyers holding stronger currencies, and therefore tends to stimulate crude demand and prices.
In late London trade, the euro struck 1.5023 dollars, a level last seen in August 2008, up from 1.4937 dollars in New York late on Tuesday.
In earlier commodity trading on Wednesday, oil prices had fallen as investors took profits from a rally the previous day which saw New York crude breach 80 dollars per barrel for the first time in one year.
A weak dollar and an upbeat mood about the global economic recovery are driving the recent surge in crude prices, according to oil industry watchers.
Despite topping 80 dollars, oil prices had finished Tuesday in negative territory after downbeat data from the ailing US property sector.
US housing starts grew in September but the pace was softer than anticipated while permits for construction fell sharply, government data showed.
New York's main contract, light sweet crude for December delivery, soared as high as 81.73 dollars per barrel -- last seen in October 2008.
Elsewhere on Wednesday, Brent North Sea crude for December delivery rallied to a similar peak at 79.98.
The US government's Department of Energy (DoE) announced Wednesday that American gasoline or petrol reserves sank 2.3 million barrels in the week to October 16.
That was far heavier than expectations of an 800,000-barrel drop, according to traders polled by Dow Jones Newswires.
Torbjorn Kjus, analyst at DnB NOR Markets, described the sharp gasoline drop as "bullish" -- indicating that it was likely to push oil prices higher.
The DoE's weekly report is a key focus for the market because the United States is the world's biggest energy consuming nation, followed by number two China.
The latest price peaks also came after the European single currency breached the key 1.50-dollar level to hit a 14-month peak, as many investors deserted the US unit in favour of higher yielding assets, dealers said.
The falling greenback makes dollar-priced oil cheaper for buyers holding stronger currencies, and therefore tends to stimulate crude demand and prices.
In late London trade, the euro struck 1.5023 dollars, a level last seen in August 2008, up from 1.4937 dollars in New York late on Tuesday.
In earlier commodity trading on Wednesday, oil prices had fallen as investors took profits from a rally the previous day which saw New York crude breach 80 dollars per barrel for the first time in one year.
A weak dollar and an upbeat mood about the global economic recovery are driving the recent surge in crude prices, according to oil industry watchers.
Despite topping 80 dollars, oil prices had finished Tuesday in negative territory after downbeat data from the ailing US property sector.
US housing starts grew in September but the pace was softer than anticipated while permits for construction fell sharply, government data showed.
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