Oil prices rise above $83 per barrel

Oil prices rose above $83 a barrel Wednesday in Asia amid rising global stock markets and a weakening U.S. dollar.

Benchmark oil for November delivery was up 30 cents to $83.12 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained $1.35 to settle at $82.82 on Tuesday.

Oil prices broke out of a year-long $70 to $80 trading range last week as global stocks rallied and the U.S. dollar fell. Crude traders often look to stock markets as a measure of overall investor sentiment while oil becomes cheaper for investors with foreign currencies when the dollar drops.

Most Asian and European stock markets rose Wednesday while the euro gained to $1.3856 from $1.3832 on Tuesday. The dollar fell to 83.04 yen from 83.25 yen.

“We look for the euro to be the primary price driver behind upcoming swings in the value of oil,” Ritterbusch and Associates said in a report. “Additional oil price gains would appear highly likely.”

A report showed U.S. crude supplies unexpectedly jumped last week — suggesting demand may be weaker than anticipated — weighed on crude prices.

The American Petroleum Institute said late Tuesday that crude inventories rose 4.4 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast a drop of 1.3 million barrels. Inventories of gasoline and distillates fell, the API said.

The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.

In other Nymex trading in November contracts, heating oil was steady at $2.295 a gallon and gasoline gained 1.08 cents to $2.1363 a gallon. Natural gas rose 3.7 cents to $3.78 per 1,000 cubic feet.

In London, Brent crude rose 26 cents to $85.10 a barrel on the ICE Futures exchange.
Source: AP

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