Oil rises above US$80 in Asia

Oil rises above US$80 in Asia Friday(update)

SINGAPORE: Oil prices rose above US$80 a barrel Friday in Asia as crude investors eyed a surge in global stock markets. Benchmark crude for December delivery was up 47 cents to $80.09 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
The contract fell 78 cents to settle at $79.62 on Thursday. Oil traders often look to stock markets for a sense of overall investor sentiment, and the Dow Jones industrial average rose 2.1 percent Thursday on better-than -expected jobless claims numbers and positive forecasts by Cisco Systems Inc. All major Asia indexes were also up in early Friday trading. Crude investors are also watching signs in recent weeks of a drop in U.S. oil supplies, which increased sharply this year as demand shrank. Some analysts forecast higher oil prices next year as the economy strengthens and demand recovers. "We expect fundamentals to improve as oil demand growth resumes," Morgan Stanley said in a report. "Until the oil market tightens, oil will be dragged in the wake of other risky asset price moves. " Morgan Stanley said it expects oil to average $85 a barrel next year. Crude has crisscrossed the $80 level for the last few weeks as investors mull weak U.S. consumer demand and a volatile dollar. In other Nymex trading, heating oil rose 1.16 cents to $2.07 a gallon.
Gasoline for December delivery gained 0.99 cent to $2.00 a gallon. Natural gas for December delivery fell 1 cent to $4.78 per 1,000 cubic feet. In London, Brent crude for December delivery rose 66 cents to $78.65 on the ICE Futures exchange. AP Earlier report Oil price slips on questions about demand NEW YORK: Oil prices slipped Thursday as investors questioned whether the U.S. would regain its appetite for petroleum. Benchmark crude for December delivery gave up 78 cents to settle at $79.62 a barrel on the New York Mercantile Exchange. In London, Brent crude for December delivery fell 90 cents to settle at $77.99 on the ICE Futures exchange. While the economy has shown signs of recovery, economists, including those at Cambridge Energy Research Associates, have predicted that world energy demand will continue to slide as automakers build cars with better mileage and countries embrace alternative fuels. That assessment, combined with Energy Information Administration data that showed a drop in oil imports last week, helped push crude prices lower. "The good news we're hearing about the economy is not translating to a stronger oil market yet," said Michael Lynch, president of Strategic Energy & Economic Research. The Labor Department said Thursday that productivity increased and the number of people seeking unemployment benefits for the first time dropped to the lowest level in 10 months. Still, analysts continued to focus on weak oil imports and tepid consumer demand. The EIA also reported Thursday that the U.S. continues to sit on an ever-expanding natural gas stockpile that's the largest on record. As of last week, 3.79 trillion cubic feet of natural gas had been crammed into storage.
Natural gas is a key energy source for power plants around the country, and a large buildup in supplies provides yet another example that factories and other businesses are struggling to ramp up their operations. Oil prices had increased for several months, primarily tracking the decline in the dollar. Crude barrels are priced in U.S. currency, and they tend to rise in price as the dollar weakens and gives buyers holding international currencies the ability to buy more with the same money.
But concerns about large petroleum surpluses and poor consumer demand have raised doubts about how high oil can go. In other Nymex trading, heating oil fell 3.26 cents to settle at $2.0576 a gallon.
Gasoline for December delivery lost 2.5 cents to settle at $1.9877 a gallon. Natural gas for December delivery rose 5.7 cents to settle at $4.782 per 1,000 cubic feet.