Jamaica Gleaner
Published: Tuesday | October 13, 2009
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Oil prices jump as dollar, temperatures fall
Energy prices rose Monday as an October chill across much of the United States sent thermometers plummeting along with the weakening US currency.

"The early blast of winter is giving oil a bit of a boost," said PFGBest analyst Phil Flynn.

Benchmark crude for November delivery gained US$1.50 to settle at US$73.27 on the New York Mercantile Exchange. The last time crude closed above US$73 was in late August with the US driving season in full swing.

Heating oil rose 4.8 cents to US$1.90 a gallon and natural gas jumped 13.5 cents to US$4.91 per 1,000 cubic feet.

In London, Brent crude rose US$1.50 to US$71.50 on the ICE Futures exchange.

Enormous supplies

Even though there are enormous supplies of all three because of the recession and there is little chance of a shortage in the near term, crude prices have risen five per cent in three trading days.

It is the weakened US currency that continues to lure global investors, who can buy oil for a bargain because it is priced in the dollar. There are billions going into the energy markets despite huge surpluses, especially in natural gas.

The US-dollar index, which tracks the dollar against other major currencies, is down 14 per cent since early March, and crude has jumped by about US$20 per barrel.

There are also hopes that energy demand will rise as the economy recovers and early indications from major corporations supported that optimism.

Aluminium maker Alcoa Inc last week opened the earnings season with a surprisingly strong profit report.

Top banks JPMorgan Chase & Company, Goldman Sachs Group Inc, Citigroup Inc and Bank of America Corp report this week along with Google Inc, Southwest Airlines Company, Intel Corp, IBM Corp, General Electric Company, and Johnson & Johnson.

In other Nymex trading, gasolene for November delivery gained 3.3 cents to fetch US$1.80 a gallon.

- AP

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