Prices at fresh one-year high on rising demand forecasts, dollar drop
TOKYO (MarketWatch) -- Crude futures climbed above $75 per barrel on Globex by Wednesday afternoon in Asia to reach their strongest intraday level in a year as traders cheered improved forecasts for global oil demand and as weakness in the U.S. currency turned investors' attention to dollar-denominated commodities.
Crude oil for November delivery was up $1 at $75.15 per barrel in electronic trading on Globex, marking the highest intraday price since October of 2008.
The front-month contract posted a climb of 88 cents to finish at $74.15 on the New York Mercantile Exchange Tuesday -- the highest settlement for a front-page contract since Aug. 24. Prices had briefly touched a 10-month high of $75 on Aug. 25.
"Oil looks strong as the U.S. dollar slumps closer and closer to a potential currency crisis," said Sean Brodrick, a natural-resources analyst at UncommonWisdomDaily.com
"Oil is the anti-dollar, like gold, and I think investors who are scared by what could happen to the dollar in the future are using those dollars to buy dollar-denominated 'real' assets that should appreciate as the greenback tanks," he said.
On Wednesday in Asia, the U.S. dollar continued to decline against its major rivals, lifting dollar-denominated commodities prices. See Currencies report.
December gold prices climbed past $1,070 an ounce. See Metals Stocks.
Adding to strength in crude Wednesday were upbeat forecasts for oil demand.
Demand rise
In its October report, the Organization of the Petroleum Exporting Countries on Tuesday raised its forecast for world oil demand by 200,000 barrels a day for both this year and 2010. See Tuesday's Futures Movers.
"OPEC raised its 2010 oil demand forecast amid the expected recovery in global economic growth," analysts at Credit Suisse wrote in a note to clients issued Monday.
The report followed news Friday that the Paris-based International Energy Agency also raised its demand outlook for this year and next. See Friday's Futures Movers.
Looking ahead to the trading session in New York, oil traders awaited petroleum inventory data from the American Petroleum Institute, which will be released on Wednesday at 4:30 p.m. Eastern time, a day late because of the Columbus Day holiday in the U.S. on Monday.
The Energy Information Administration will release its more closely watched supply report on Thursday morning.
Analysts polled by Platts expect a build in commercial crude stocks of 2.2 million barrels for the week ended Oct. 9. They also project an increase of 1.6 million barrels in gasoline stocks as well as a decline of 1 million barrels in distillate stocks.
