Oil prices remained above $87 a barrel on Tuesday, near 2010 highs, supported by rising stock markets in Europe and a weaker dollar.
By early afternoon in Europe, benchmark oil for December delivery was up 31 cents at $87.37 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the day it reached $87.63, its highest intraday high of the year. On Monday, the contract settled up 21 cents at $87.06 a barrel — a closing high for the year.
Oil has been boosted in part by October’s better-than-expected jobs figures, which added to expectations that demand for fuel will improve.
The U.S. Labor Department reported on Friday that employers added 151,000 jobs in October, the first net gain in five months. The unemployment rate remained at 9.6 percent.
The jobs report could signal more improvement in the world’s largest economy, which could lead to stronger demand from consumers and businesses for fuel. In the short-term, however, improved economic indicators could strengthen the dollar and dampen enthusiasm for oil.
Oil is priced in dollars and becomes cheaper for holders of foreign currencies when the dollar is weaker. On Tuesday, the euro was rebounding against the dollar, after falling on worries about Ireland’s debt woes.
The euro was up to $1.3950 from $1.3923 late Monday in New York, while the British pound advanced to $1.6165 from $1.6132.
Analysts said both the Nymex and Brent contracts were in a «technical breakout mode» and expected to exceed the $90 mark.
«At some point, continued price gains in crude could turn on the bulls, as we could start seeing an impact on demand, or more likely, rising inflation and higher interest rates, particularly in emerging markets,» said senior commodity analyst Edward Meir at MF Global in New York.
Markets were also awaiting the weekly U.S. oil stocks reports.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department’s Energy Information Administration — the market benchmark — will be out on Wednesday.
Data for the week ending Nov. 5 is expected to show builds of 2.1 million barrels in crude oil stocks and a fall of 1.3 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
In other Nymex trading in December contracts, heating oil was up 0.93 cent to $2.407 a gallon and gasoline gained 1 cent to $2.1885 a gallon. Natural gas added 5.1 cents to $4.139 per 1,000 cubic feet.
In London, Brent crude was up 24 cents to $88.70 a barrel on the ICE Futures exchange.
AP