oil prices fluctuates again ?
Oil prices edged up Monday after briefly surpassing $99 a barrel on signs of colder weather in the United States and Europe and worries about weakness of the U.S. dollar.
The Thanksgiving holiday on Thursday marked the unofficial start of winter in the United States. Among other areas, southeastern New Mexico got up to 9 inches of snow and experienced colder than normal temperatures over the holiday weekend. Snow also fell in Germany over the weekend.
“The onset of cold U.S. weather is going to boost fuel demand,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Light, sweet crude for January delivery on the New York Mercantile Exchange added 13 cents to $98.31 a barrel in electronic trading by midafternoon in Europe, after reaching a high of $99.11 earlier Monday.
On Friday, the contract rose 89 cents to settle at a closing record of $98.18 a barrel.
January Brent crude fell 6 cents to $95.70 a barrel on the ICE Futures exchange.
Meanwhile, the dollar fell slightly against the euro on Monday as speculation continued that the American credit crisis will lead to another cut in U.S. interest rates.
“The weakened U.S. dollar remains at record low levels and so we’ve got pricing trying to test $100 again,” Shum said.
Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the U.S. currency is falling.
Nymex crude prices reached a trading record of $99.29 a barrel on Wednesday, and are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.
“Almost anything could push prices higher from here and we have to expect to see a move to” $100 per barrel this week, said Peter Beutel, president of U.S. energy risk management firm Cameron Hanover, in a research note, listing a U.S. Federal Reserve interest rate cut, a weaker U.S. dollar, colder weather forecasts or “any petro-political problem” among the factors which could push oil prices to three digits.
“We have reached the point, though, where the inability to touch or break $100 this week would be seen as rather a spectacular failure,” Beutel wrote.
Shum said that data suggesting OPEC is increasing production more quickly than expected is likely to keep a temporary cap on crude oil prices.
Oil Movements, an oil tanker tracking firm based in Britain, reported that Organization of Petroleum Exporting Countries oil exports are likely to jump by an average of 720,000 barrels a day in the four weeks ended Dec. 8, more than the expected 500,000 barrels per day.
Crude oil prices rose 43 percent between August and early November on falling domestic inventories, concerns about supply disruptions overseas and, many analysts argue, speculative buying. But recent forecasts have suggested high prices are cutting demand.
Nymex heating oil rose 1.08 cents to $2.7150 a gallon while gasoline prices gained 0.58 cent to $2.4728 a gallon. Natural gas futures rose 19.9 cents to $7.899 per 1,000 cubic feet.
Associated Press Writer Gillian Wong in Singapore contributed to this report.