Oil price trading at 1 year high around $75 a barrel

NYMEX light oil prices jumped above $75 a barrel Wednesday in Asia for the first time in a year on investor optimism crude demand will improve ahead of the Christmas shopping season.

Benchmark crude oil futures for November delivery was up 91 cents to $75.06, the highest since October 2008, by midday Singapore time in electronic trading on the NYMEX. The contract gained 88 cents to settle at $74.15 on Tuesday.

Some analysts expect an increase in diesel fuel demand from US truckers supplying inventory for the year end holiday shopping season will trigger a sustained rise above $75. “We believe oil prices are poised to move higher,” Goldman Sachs, which expects prices to rise to $85 a barrel by the end of the year, said in a report. “All indicators still point to a normal seasonal pick-up in shipping to retailers this year.”

Burgeoning oil supplies this year have weighed on oil prices. Investors will be looking to the latest US inventory data later on Wednesday and Thursday from the American Petroleum Institute and the Energy Information Administration.

“The problem is really that we have a lot of crude inventory,” said Victor Shum, an analyst with consultancy Purvin & Gertz in Singapore. “This supply overhang makes the price vulnerable to any bad economic news, which we still get from time to time.”

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