Oil prices rise

5th October 2010, Comments 0 comments

World oil prices rose on Tuesday as traders reacted in part to a sliding dollar.

New York's main contract, light sweet crude for delivery in November, gained 50 cents to 81.97 dollars a barrel.

Brent North Sea crude for November delivery grew 26 cents to 83.54 dollars.

"The recent rebound in the global equity markets as well as the US dollar weakness is driving crude oil prices higher," said Sucden Financial Research analyst Myrto Sokou.

A falling US unit can make dollar-priced commodities like oil cheaper for buyers holding rival currencies. That tends to stimulate demand and prices.

Sokou added: "It seems that today the market sentiment followed the positive news from Japan that spread optimistic signs across the financial markets and brought risk appetite back to the board."

Europe's main stock markets rebounded on Tuesday in the wake of upbeat economic data and company results, and after share prices rallied in Tokyo.

Japanese shares jumped 1.47 percent on Tuesday, buoyed by the Bank of Japan's surprise announcement of a zero-interest rate policy, brokers said.

The BoJ also announced further monetary easing measures in a bid to combat the harmful strength of the yen and beat persistent deflation.

On Monday, crude oil futures had enjoyed mixed fortunes as Iraq reported a sharp rise in proven oil reserves to rank it number three in the world.

Iraq on Monday reported 143.1 billion barrels of oil that it believes it can extract from the ground, representing a 24-percent increase over the old level of 115 billion barrels.

The increase leaves Iraq behind Saudi Arabia and Venezuela in terms of known reserves, according to data from the Organization of Petroleum Exporting Countries.

Oil had forged five-month highs near 84 dollars last week in London as upbeat economic data pointed to a strong outlook for energy demand.

© 2010 AFP

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