Oil prices advance on US data

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World oil prices approached 83 dollars per barrel on Tuesday as traders absorbed rising consumer confidence in the United States, which is the biggest crude-consuming nation.

New York's main contract, light sweet crude for delivery in December, rose 19 cents to 82.71 dollars a barrel.

Brent North Sea crude for December delivery added 18 cents to 83.72 dollars per barrel in afternoon London trade.

"Crude oil prices climbed towards 83 dollars per barrel, following strong US economic data that improved market sentiment and brought risk appetite back to the table," said Sucden analyst Myrto Sokou.

US consumer confidence was slightly boosted in October but remained very close to historic lows, according to a key index.

The Conference Board consumer confidence index for October stood at 50.2, up from 48.6 in September, beating analysts' consensus forecast of 49.0.

Consumer confidence is seen as a pivotal indicator to the health of the US economy, which is driven mostly by internal retailer consumption.

"Solid US economic figures improved market sentiment," added Sokou.

"However, it looks like investors remain cautious ahead of the weekly oil inventories reports that might show high levels of oil inventories for third week in a row."

The US Department of Energy will publish its weekly snapshot of American crude oil reserves on Wednesday.

Meanwhile on Tuesday, a key monthly report showed US home prices accelerated their decline in August from July, adding new concerns over the housing market.

The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.3 percent in August from July on a seasonally adjusted basis, following a 0.6 percent rise in July.

Oil had rallied on Monday as a weaker greenback had encouraged investor interest in dollar-denominated commodities, which become cheaper for buyers holding stronger foreign currencies.


© 2010 AFP

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