Oil settles near US$80 a barrel again

Published: Saturday February 27, 2010 MYT 11:10:00 AM

NEW YORK: Oil prices hit US$80 a barrel Friday to end a wild trading week that saw prices swing in the opposite direction every day.

Benchmark crude for April delivery added $1.49 to settle at $79.66 a barrel on the New York Mercantile Exchange.

Prices reached as high as $80.05 a barrel earlier in the day.

Crude barrels have wavered between $70 and $80 all year, and the latest batch of economic reports failed to give a clear picture of when energy demand in the U.S. would pick up.

The Energy Information Administration said the country has started consuming more petroleum over the past few weeks.

It also said the U.S. is still working off a hefty crude surplus built up during the recession.

And gasoline contracts slid this week as a refinery strike ended in France.

The U.S., which imports much of its fuel from Europe, still has larger-than-average supplies of both motor gasoline and distillate fuels like diesel.

Crude hit $80 on Monday and Wednesday, only to fall on Tuesday and Thursday.

On Friday, prices jumped again after the government reported that the economy grew at an annual rate of 5.9 percent in the final three months of 2009.

The GDP reading was the strongest in six years, though the economy isn't expected to maintain that level of growth this year.

Crude prices also got a boost Friday from a weaker U.S. dollar.

Dollar-based commodities like oil become cheaper for international investors when the dollar falls.

In other Nymex trading, heating oil for March delivery added 3.87 cents to settle at $2.0249 a gallon, while gasoline for March delivery rose 4.18 cents to settle at $2.0788 a gallon.

Natural gas for April delivery gained 4.6 cents to settle at $4.813 per 1,000 cubic feet.

In London, Brent crude rose $1.30 to settle at $77.59 on the ICE futures exchange. - AP

Source: http://biz.thestar.com.my/news/story.asp?file=/2010/2/27/business/20100227111429&sec=business