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Oil price trading above $77 on Monday, weaker US dollar
Published on November 16, 2009 by oilprices · 1 CommentOil prices rose above $77 a barrel in early trading on Monday in Asia amid a weaker US dollar and an improving global crude oil demand outlook next year.
Benchmark crude oil futures for December delivery was up 86 cents to $77.21 a barrel at midday Singapore time in electronic trading on the NYMEX, while in London, Brent crude oil was trading steady around the $75 dollar range on the ICE Futures exchange.
Some analysts expect oil demand to grow next year, especially in emerging economies, as a global economic recovery strengthens. Bank of America Merrill Lynch raised its forecast for the average price of crude to $85 a barrel from $75.
“The deceleration in global oil demand growth is easing,” the bank said in a report. “No doubt, real oil consumption continues to display cyclical weakness. The combination of tighter physical oil supply and demand fundamentals, loose monetary policy, and a weaker US dollar are creating a growing risk for oil prices to spike above $100 a barrel as we head into 2011.”
Oil prices have soared from $32 in December as the financial crisis stabilized and economies emerged from recession. “The epoch of cheap oil price is over,” Gazprom Deputy Chairman Alexander Medvedev said Saturday at the Asia Pacific Economic Cooperation summit. “The price of oil will be anywhere in the region of $75 to $85 in 2010.”
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Oil prices have rallied recently because of the weak US dollar and the positive GDP data out of Japan.
Those factors are giving a lot of opportunities for Asian traders to push oil prices higher.