Crude Oil Set for Biggest Weekly Gain Since October (Correct)
By Nidaa Bakhsh and Yee Kai Pin
(Corrects price increment in last paragraph.)
Dec. 18 (Bloomberg) -- Crude oil advanced in New York, rising to more than $74 a barrel and poised for its biggest weekly gain since October on optimism fuel demand will increase amid improved prospects for a global economic recovery.
Oil has gained 6 percent this week, the most since the week ended Oct. 16, after the Federal Reserve said factories produced more goods in November than anticipated, signaling fuel demand may rise. Below-normal temperatures, which boosted heating demand last week, are forecast from Chicago to New York in the next two weeks, while snow fell in London.
“Colder temperatures are improving sentiment on demand,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. A weaker dollar is also helping boost the appeal of oil as a hedge, he said.
Crude oil for January delivery rose as much as $1.46, or 2 percent, to $74.11 a barrel in electronic trading on the New York Mercantile Exchange and traded at $74.06 a barrel at 11:40 a.m. London time. Futures, which lost 54 percent in 2008, have gained 65 percent this year.
European stocks advanced, extending the second weekly gain this month, after a report showed German business confidence increased. The Dow Jones Stoxx 600 Index rallied 0.9 percent to 249.32 at 10:42 a.m. in London, set for a 1.7 percent gain this week.
German business confidence in December increased to the highest since July 2008, a sign the economic recovery is on track. The Munich-based Ifo institute’s business climate index, based on a survey of 7,000 executives, rose to 94.7 from 93.9 in November, higher than the 94.5 median estimate of 33 economists in a Bloomberg News survey.
The Energy Department said Dec. 16 that U.S. crude oil inventories declined to the lowest since Jan. 9. Distillate fuel stockpiles, which include heating oil and diesel, fell 2.95 million barrels to 164.4 million.
“The demand outlook is brightening,” said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. “We had a very supportive set of numbers from the Department of Energy.”
Oil slipped yesterday as the dollar strengthened against the euro, damping the appeal of commodities as an alternative investment. The U.S. currency was at $1.4388 per euro at 11:31 a.m. in London, from $1.4338 in New York yesterday.
U.S. jobless claims unexpectedly rose last week, a reminder the labor market may take time to recover. Initial jobless claims increased 7,000 to 480,000 in the week to Dec. 12, from a revised 473,000 the previous week, Labor Department data showed yesterday.
“I don’t see the oil market as being especially tight but I think anticipation of an international economic recovery is a key factor still supporting it,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “What we’re seeing is some buying partly reflecting the earlier dip in the oil price.”
The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world’s oil, will meet next week in Luanda, Angola. The 12-member group announced 4.2 million barrels a day of production cuts in 2008.
OPEC is aiming for an oil price above $70 a barrel, Venezuela’s Finance Minister Ali Rodriguez, a former group president, said yesterday in Caracas. OPEC President Jose Maria Botelho de Vasconcelos said members will keep output quotas unchanged, Radio Ecclesia reported.
OPEC will probably maintain its output quotas at next week’s meeting as prices trade close to members’ $75-a-barrel target, a Bloomberg News survey showed.
PS. Oil a sector near the top of my list, so is BMs. Might have to rejig the list going forward, like Natural Gas if its trend persists of which we shall see once winter is half way thru or over.....and going into summer. As for gold, still really hasnt crashed, albeit is feels like it since it ran about 250 from 1000 and now back down to about 1120....stocks remain pretty stable since they really didnt go up that much beyond 1100 so the markets always trying to price in the rises and falls of commodities and earnings, future outlook as should you to stay ahead of the herd...especially when dealing with juniors and a lot of fluffy specs.
My top 10 sectors for 2010: (Fluffy specs didnt make the list, if it did it would be near the top of the list but fall out of bed to the last of the list pretty fast, as fast as within a day or two or maybe a week or two......like number of 1000 if I had a top 1000 list, of which would contain quite a few of GI11's foolishness stocks and 1000s of promos gone awry....hopefully no bk but always a r/s, if not, then pump another story to make it back to top 10....lol.)
PSS. Ahhhhhhhhhhh, GI11 cant get in to make kiddie comments but waste time reading and calling me on his blog, blog of nothing. LOL!!!!! Dont like ignore.