Fund Inflows Push Oil to New 18-Month Highs
Source: Reuters, Christopher Johnson (4/1/10)
"Upward momentum is very strong."
The move higher came despite a stronger dollar, which often dampens enthusiasm for commodities, and after news of yet another build in U.S. crude oil inventories.
U.S. crude for May delivery rose 68 cents to $84.44 a barrel by 0800 GMT, after hitting an intraday high of $84.54 and settling at $83.76 a barrel on Wednesday, the highest close since October 2008.
London ICE Brent climbed 66 cents to $83.36.
Crude oil futures will not trade on Friday in either New York or London because of the Easter holiday.
"Upward momentum is very strong," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. "The market is rising even with a stronger dollar and even after what were bearish figures on U.S. inventory levels."
"Money is flowing into commodities at the beginning of the new quarter from all sorts of investors, including funds."
Oil prices dipped briefly on Wednesday after government data showed U.S. crude inventories rose by 2.9 million barrels to 354.2 million barrels last week, their ninth straight gain. Gasoline stockpiles logged a modest but unexpected gain.
But the market soon returned to strength.
U.S. front-month crude oil rose 5.5% in the first quarter, its fifth consecutive gain. Although it has more than doubled from a December 2008 low, it is still well short of a record high near $150 a barrel hit earlier that year.
Oil producers and consumers hope to tackle that volatility in annual meetings on the outlook for energy markets, part of an effort to deepen cooperation between producer and consumer members of the International Energy Forum.