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Oil hovers over $80

20 October 2009 07:30 (UTC +04:00)

Bakuâ€“ APA-Economics. Oil rose to a one-year high above $80 a barrel in New York as the dollar slipped to a 14-month low against the euro, increasing commoditiesâ€™ appeal as an alternative investment, Bloomberg reported.

The dollar index, which measures the greenback again six major currencies, fell to its lowest since August 2008. Asian stock markets gained, extending increases in U.S. equities, and raising expectations fuel demand will increase as the global recession ends.

Crude oil for November delivery rose as much as 44 cents, or 0.6 percent, to $80.05 a barrel in electronic trading on the New York Mercantile Exchange, the first time the front-month contract has traded above $80 since Oct. 14, 2008. It was at $79.92 a barrel at 11:51 a.m. Singapore time. Prices settled at $79.61 yesterday, the highest close since Oct. 13, 2008.

The November contract expires today. The more actively traded December contract was at $80.24 a barrel, up 28 cents. Oil is set to close higher for a ninth straight day, the longest streak since July 27.

Oil advanced 1.4 percent yesterday as U.S. stocks climbed on better-than-estimated earnings and speculation the economy is healthy enough for policy makers to unwind efforts to shore up the financial system.

Crude may rise to $89.95 a barrel now that it has breached a key resistance level of $76.28 a barrel, according to technical analysis of Fibonacci retracements by Australia & New Zealand Banking Group Ltd.
Oil prices have gained 25 percent in the past three months as a recovery in equity markets emboldened investors and the sliding U.S. dollar prompted buying of commodities. The dollar traded at $1.4981 per euro, the weakest since August 2008, as of 11:47 a.m. in Tokyo from $1.4965 in New York yesterday.
Brent crude oil for December settlement rose as much as 41 cents, or 0.5 percent, to $78.18 a barrel on the London-based ICE Futures Europe exchange. It was at $78.11 at 11:58 a.m. Singapore time. Yesterday, the contract rose 78 cents, or 1 percent, to $77.77 a barrel.