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Oil nears $80 a barrel in Asia as global stock markets surge
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SINGAPORE - Oil prices climbed toward $80 a barrel Friday in Asia as crude investors eyed a surge in global stock markets.
Benchmark crude for December delivery was up 34 cents to $79.96 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 78 cents to settle at $79.62 on Thursday.
Oil traders often look to stock markets for a sense of overall investor sentiment, and the Dow Jones industrial average rose 2.1 percent Thursday on better-than-expected jobless claims numbers and positive forecasts by Cisco Systems Inc. All major Asia indexes were also up in Friday trading.
Crude investors are also watching signs in recent weeks of a drop in U.S. oil supplies, which increased sharply this year as demand shrank. Some analysts forecast higher oil prices next year as the economy strengthens and demand recovers.
"We expect fundamentals to improve as oil demand growth resumes," Morgan Stanley said in a report. "Until the oil market tightens, oil will be dragged in the wake of other risky asset price moves."
Morgan Stanley said it expects oil to average $85 a barrel next year.
Crude has crisscrossed the $80 level for the last few weeks as investors mull weak U.S. consumer demand and a volatile dollar.
In other Nymex trading, heating oil rose 0.85 cent to $2.07 a gallon. Gasoline for December delivery gained 0.96 cent to $2.00 a gallon. Natural gas for December delivery fell 1.5 cents to $4.77 per 1,000 cubic feet.
In London, Brent crude for December delivery rose 68 cents to $78.68 on the ICE Futures exchange.
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