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Oil rises above $77 in Asia amid weakening dollar, improving crude demand outlook
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SINGAPORE - Oil prices rose above $77 a barrel Monday in Asia amid a weaker U.S. dollar and an improving global crude demand outlook for next year.
Benchmark crude for December delivery was up $1.02 to $77.37 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, the contract fell to as low as $75.57, the cheapest since Oct. 15, before settling down 59 cents at $76.35.
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 U.S. dollar are creating a growing risk for oil prices to spike above $100 a barrel as we head into 2011."
The euro rose to $1.4986 in Asian trading Monday from $1.4923 on Friday while the dollar was steady at 89.55 yen.
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."
In other Nymex trading, heating oil rose 2.11 cents to $1.99 a gallon. Gasoline for December delivery gained 2.57 cents to $1.94 a gallon. Natural gas for December delivery jumped 7.8 cents to $4.47 per 1,000 cubic feet.
In London, Brent crude for December delivery fell 96 cents to $77.26 on the ICE Futures exchange.
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