World oil prices approach 82 dollars

3rd August 2010, Comments 0 comments

Oil prices stretched towards 82 dollars per barrel on Tuesday, on the back of buoyant market sentiment, the weak dollar and hurricane concerns in the US Gulf of Mexico, analysts said.

New York's main contract, light sweet crude for delivery in September, gained 50 cents to 81.84 dollars a barrel.

Brent North Sea crude for September added 70 cents to 81.52 dollars in late morning London deals.

Oil had surged past 81 dollars on Monday, with sentiment boosted by soaring global stock markets, strong bank results and solid US economic data.

Further support came from the weak greenback, which makes dollar-priced commodities cheaper for buyers using stronger currencies, and therefore tends to stimulate demand.

Prices also strengthened on fears about the ongoing hurricane season in the Gulf of Mexico, where many US energy installations are based.

"The combination of bullish stocks, a weak dollar and most notably the hurricane season has pushed the price of oil over 81 dollars a barrel," said analyst Rebecca Seabury at the Inenco energy consultancy in London.

"In the short term, the hurricane season is likely to continue spurring on bullish sentiment in the oil market, as potential storms threaten US and Mexican infrastructure.

"Alongside this, with the release of key US employment data due to be released this week, we could temporarily see the price reaching 84-86 dollars."

Friday's employment data is a key indicator for the economic health of the United States, which is the biggest energy-consuming nation in the world.

Traders are also eagerly awaiting Wednesday's weekly snapshot of US energy inventories.

Crude oil prices had soared on Monday as Wall Street surged after news that the US manufacturing sector expanded for a 12th straight month in July.

The Institute of Supply Management July manufacturing index fell to 55.5 points from 56.2 percent in June, but this was well above market expectations of 54.2 percent. A reading above 50 indicates expansion in manufacturing.

© 2010 AFP

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