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OIL: Oil prices near 76 dollars in New York

Posted on October 15th, 2009 in NewYorkStock Market

London (Thomson Financial) – Crude oil prices climbed almost 76 dollars a barrel in New York late Thursday trading in Europe. They were supported by news of a surprise decline in gasoline stocks in the United States and by the continued weakening of the dollar.

By late afternoon, a barrel of Brent North Sea crude for November delivery (the last trading day of the contract) taking 32 cents from Wednesday’s close at 73.42 dollars on the InterContinental Exchange (ICE).

On the New York Mercantile Exchange (Nymex), the price stood at 75.80 dollars, up 62 cents. Earlier, prices reached 75.96 dollars, its highest level since mid-October 2008.

While the market is concerned for weeks of high inventories of refined products in the United States, as a symptom of an over-supplied market, he received Thursday a new doubly reassuring gasoline stocks have plunged 5.2 million barrels more than expected by analysts, and those of distillates (including diesel and heating oil) also fell more than expected 1.1 million barrels.

“Despite these changes in inventory levels, the absolute levels of reserves remains high. In fact, levels of reserves of crude and distillates are historically high for this time of year,” tempered Jason Schenker, the founder of the firm Prestige economics.

Crude oil prices continued to benefit also from the general euphoria that gripped markets after a series of good results in the United States and the surge in the Dow Jones above 10,000 points for the first time in over a year. The price spike also follows a continuing slide of U.S. dollar fell Thursday to 1.4968 dollars per euro, its lowest level against the euro in 14 months.

“Play” oil dollar cons

This leads many investors to “play” the oil against the dollar, ie to buy oil to protect their assets against the depreciation of the dollar. Oil is normally insensitive to inflation, since it is one of the first components.

The highly speculative nature of the rise in crude prices led analysts to worry about forming a new bubble. “The dollar, dollar, dollar!” And exclaimed Olivier Jakob of Petromatrix firm.

“To solve the bursting of a bubble (real estate, editor’s note), the Fed has no other solution than to create another,” Judge said. For him, the current rise in crude prices is dictated more by the weak dollar as a real economic recovery, and therefore “must be extremely wary of strong current action and energy.