NYMEX crude oil futures still on bull run, weak dollar, stocks info

Crude oil futures rose in Asia trading Friday for a seventh consecutive day, driven by a weaker dollar and the overnight report of a drop in US inventories, but gave up some of its gains as rallies in Asian shares fizzled.

At 0612 GMT, NYMEX light, sweet crude oil futures for delivery in November traded 35 cents higher at $77.93 a barrel in the Globex electronic session, after touching a fresh one-year high of $78.17 a barrel. December Brent crude on London’s ICE Futures exchange was up 22 cents at $76.45 a barrel.

Asian stock markets were mostly lower with several markets reversing early gains as investors awaited fresh leads from major US corporate earnings.

Crude could make a run for $80 a barrel, with support from the drop in US oil product inventories, buoyant equities and a weak dollar, but such levels may not be sustainable, analysts said.

“The possibility of the oil price running a little higher in the near term cannot be dismissed. However, at this point, we remain of the view that the oil price is most likely to correct lower by end-2009,” said David Moore at Commonwealth Bank of Australia in a note to clients.

Downward pressure remains from a huge supply overhang and weak demand, but those factors appear to be on the back burner for now.

“We still have much difficulty building a bullish case for this complex based strictly on fundamental merits,” said Jim Ritterbusch at Ritterbusch & Associates. “(But) we will continue to caution against picking a top to this strong rally in which technical factors and the direction of the dollar will continue to rule for a few more weeks.”