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Oil price moves up on supply concerns

09 November 2009 07:45 (UTC +04:00)

Bakuâ€“ APA-Economics. Crude oil rose from a one-week low as Hurricane Ida entered the Gulf of Mexico, forcing BP Plc and Chevron Corp. to cut output, and as the dollar weakened, Bloomberg reported.
Oil climbed above $78 a barrel after Ida, a Category 2 hurricane, strengthened after entering the Gulf, which accounts for 27 percent of U.S. crude production and 15 percent of natural gas output. The dollar declined against 12 of its 16 major counterparts, making commodities more attractive as alternative investments.
Crude oil for December delivery rose as much as $1.02, or 1.3 percent, to $78.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $78.34 at 1:46 p.m. Singapore time.
The contract dropped $2.19, or 2.8 percent, to $77.43 on Nov. 6, the lowest settlement since Oct. 30, after a report showed unemployment in the U.S., the worldâ€™s biggest oil user, climbed to 10.2 percent, the highest in 26 years.
Oil also gained after Petroleos Mexicanos, Mexicoâ€™s state oil company, shut 90 wells at onshore fields in the western states of Veracruz and Tabasco because of storms and flooding, the EFE news service reported.
Oil reached a one-year high of $82 on Oct. 21, as rising equities boosted investor confidence and a falling dollar encouraged buying of physical assets.

Oil prices are also supported as the dollar fell against the euro today after the Group of 20 governments agreed to keep stimulus measures and remained silent on the greenbackâ€™s decline this year. Investors purchase commodities including crude as an inflation hedge as the currency drops.
The dollar fell to $1.4938 per euro as of 1:55 p.m. Singapore time from $1.4847 on Nov. 6.
Brent crude for December settlement rose as much as $1, or 1.3 percent, to $76.87 a barrel on the London-based ICE Futures Europe exchange. It was at $76.81 at 1:57 p.m. Singapore time. It fell 2.7 percent to $75.87 on Nov. 6.