Oil Brakes after Hitting 2-Year High
Source: Associated Press (11/9/10)
"Global energy demand will strengthen through 2035."
Benchmark oil for December delivery added $0.08 cents to $87.14 a barrel in midday trading on the New York Mercantile Exchange.
Earlier, it hit $87.63 a barrel, the highest level since oil hit $89.28 a barrel during intraday trading in October 2008 as the depth of the global financial crisis took hold.
Oil and other energy prices have been climbing for weeks as traders have taken advantage of a weaker dollar stemming from the Federal Reserve's multi-billion dollar bond-buying program designed to revitalize the economy.
While the plan is expected to decrease already low interest rates, the influx of dollars weakens the U.S currency.
"While the market seems to be grinding higher, it doesn't seem to want to back off from these new highs we keep making," Tradition Energy analyst Gene McGillian said.
Many analysts think oil could top $90 a barrel by the end of the year. PFGBest analyst Phil Flynn said one thing holding back a stronger rally is still-plentiful supplies of oil and gasoline and muted demand.
The International Energy Agency said has predicted that global energy consumption will rise 36% to 16.7 billion metric tons of oil equivalent by 2035.
China's demand will jump 75%, which will account for more than a third of increase in energy use, the IEA predicted in its annual World Energy Outlook.
The IEA report also predicted oil prices could hit $135 a barrel and would average $113 a barrel by 2035.
Meanwhile, a cold snap in the Northeast and the Rockies has traders thinking demand may strengthen for heating oil and natural gas as the winter heating season gets under way.