Oil, fuel prices jump as dollar, temperatures fall | Shanghai Daily

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Oil, fuel prices jump as dollar, temperatures fall

ENERGY prices rose yesterday as an October chill across much of the United States sent thermometers plummeting along with the weakening U.S. currency.

"The early blast of winter is giving oil a bit of a boost," said PFGBest analyst Phil Flynn.

Benchmark crude for November delivery gained US$1.50 to settle at US$73.27 on the New York Mercantile Exchange. The last time crude closed above US$73 was in late August with the U.S. driving season in full swing.

Heating oil rose 4.16 cents to settle at US$1.8944 a gallon and natural gas jumped 11 cents to settle at US$4.88 per 1,000 cubic feet.

Even though there are enormous supplies of all three due to the recession and there is little chance of a shortage in the near term, crude prices have risen 5 percent in three trading days.

It is the weakened U.S. currency that continues to lure global investors who can buy oil for a bargain because it is priced in the dollar. There are billions of dollars entering energy markets despite huge surpluses, especially in natural gas.

The U.S. dollar index, which tracks the dollar against other major currencies, is down 14 percent since early March, and crude has jumped by about US$20 per barrel in the same time.

There are also hopes that energy demand will rise as the economy recovers. Early quarterly reports from major corporations supported that optimism somewhat.

Aluminum maker Alcoa Inc. last week opened the earnings season with a surprisingly strong profit report. Top banks JPMorgan Chase & Co., Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp. report this week along with Google Inc., Southwest Airlines Co., Intel Corp., IBM Corp., General Electric Co., and Johnson & Johnson.

In other Nymex trading, gasoline for November delivery gained 3.1 cents to finish at US$1.799 a gallon. In London, Brent crude rose US$1.36 to settle at US$71.36. on the ICE Futures exchange.



 

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