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Oil price goes above $78 a barrel Oil price rise nears $80 a barrel
(about 10 hours later)
Oil prices have climbed to more than $78 a barrel, reaching the highest levels for nearly a month. Oil prices have climbed to more than $79 a barrel, reaching the highest levels for five weeks.
In morning trading in London, US crude for February delivery rose 30 cents from Christmas Eve's closing figure to $78.35 a barrel. During Monday's trading in London, US crude touched $79.12 a barrel before falling back later to $78.77.
London Brent crude went up 40 cents to $76.71 a barrel. Heating oil futures led the gains, while London Brent crude rose by more than a dollar to $77.32 a barrel.
Prices were lifted by hopes that figures due to be released later this week would show stocks were being reduced in the US. Prices rose following forecasts of colder weather in the United States, and the expectation of increased consumption and falling reserves.
That would indicate that demand was rising and signal an improvement in the US economy.That would indicate that demand was rising and signal an improvement in the US economy.
Some traders hope that a good figure will leave the price of US crude oil above $80 a barrel for the year-end. The north-west of the US is also the world's largest heating oil market.
Crude reckoning
On Thursday last week, benchmark crude rose $1.38 to settle at $78.05. Oil markets were closed on Friday for Christmas.On Thursday last week, benchmark crude rose $1.38 to settle at $78.05. Oil markets were closed on Friday for Christmas.
Inventory figures from the Energy Information Administration later this week will decide if oil prices can end the year above $80 a barrel, according to Clarence Chu, a trader with Hudson Capital Energy in Singapore. Falling supplies?
The government last week reported a crude stocks drawdown of five million barrels and if inventories continue to decline - suggesting improved demand - it will be a boost to crude prices. Inventory figures detailing the amount of oil held in stock are expected later this week from the Energy Information Administration.
Better employment figures in the US last week also helped to lift hopes of economic recovery and raised expectations of stronger consumer spending. News of low stock levels could push oil prices above $80 a barrel by the end of the year, according to Clarence Chu, a trader with Hudson Capital Energy in Singapore.
Better employment figures in the US last week also helped to lift hopes of economic recovery and raised expectations of stronger consumer spending and oil consumption.