|
SINGAPORE: Oil spiked past $93 in Asian trade Monday
for the first time to set a new intra-day high as tensions in the
Middle East continued to spook investors, dealers said.
Prices were also partly driven up
by a new tropical storm, dubbed Noel, in the Caribbean which
investors fear may make its way to the United States gulf coast
where many of the country’s energy facilities are located, they
said.
At 2:20 p.m. (0620 GMT) New
York’s main futures contract, light sweet crude for December
delivery had eased from its new trading high of $93.20 to $93.06.
The contract had breached $92 for the first time on Friday.
It is currently up $1.20 from its
all-time closing high of $91.86 Friday.
Brent North Sea crude for
December delivery also surged to a new trading high, rising $1.21 to
$89.90. Its previous high was $89.30 set on Friday.
“What we see is a continuation
of the trend that was in place Friday,” said David Moore, a
commodity strategist with the Commonwealth Bank of Australia in
Sydney.
“Geopolitical tensions, issues
regarding tensions between Turkey and Kurdish rebels . . . those
sort of factors have added to oil prices,” he said.
Tensions between Turkey and
Kurdish militants have fueled concerns that energy supplies from the
Middle East, where Iran’s nuclear program has already triggered
sanctions from western nations, will be disrupted.
Crude futures have rocketed by at
least $10 in a month and by $30, or around 50 percent, this year.
Given the current situation,
prices are likely to rise further and $100 a barrel for oil cannot
be ruled out, said Moore.
“I wouldn’t be surprised if
in the very short term we see oil prices continue to move a little
bit higher,” he said.
“It is certainly possible they
will move higher . . . I personally don’t believe we will see oil
prices at a $100 but it is not impossible given the situation.”
Reports that Mexico had cut its
crude output because of a storm was also a factor, said Dariusz
Kowalczyk, a Hong Kong-based senior investment strategist with CFC
Seymour securities firm.
Kowalczyk also predicts prices
are headed north given the prevailing conditions.
“I think pretty much at this
point anything goes,” he said.
The dollar’s continued weakness
was also bolstering oil prices as investors now find it cheaper to
buy commodities futures including oil, which is priced in the
greenback.
In Asian trade Monday, the dollar
sank to a new low against the euro as market players grew
increasingly confident about the prospect of another US interest
rate cut this week.
The euro hit $1.4426 in Tokyo
trade, breaking the $1.44 level for the first time since the single
European currency’s creation in 1999.
 --AFP
|
