Oil Trades Near 27-Month High as Economic Recovery May Boost Energy Demand
By - Jan 3, 2011 6:39 PM ET
Oil traded near a 27-month high in New York after growth in U.S. and European manufacturing bolstered optimism fuel demand may increase as the economic recovery strengthens. Futures advanced 0.2 percent yesterday after the Institute for Supply Management’s U.S. factory index climbed to 57 in December from 56.6, the fastest pace in seven months. European manufacturing grew more than initially estimated in December, powered by Germany’s export-led expansion.
“Oil looks like one of the best investments of 2011,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “Investors want to get in fast and get in early. Any way you look at it, oil is going to be in demand this year.”
Crude for February delivery was at $91.67 a barrel, up 12 cents, in electronic trading on the New York Mercantile Exchange at 10:26 a.m. Sydney time. Yesterday, the contract rose 17 cents to $91.55, the highest settlement price since Oct. 3, 2008. Oil climbed 15 percent in 2010.
U.S. construction spending rose in November for a third month, helped by federal government projects. The 0.4 percent gain followed a 0.7 percent increase in October, the Commerce Department said yesterday.
A gauge of factory activity in the euro area rose to 57.1 from 55.3 the previous month, London-based Markit Economics said yesterday. That was higher than the 56.8 reported earlier for December. Readings above 50 indicate expansion.
Brent crude for February settlement added 9 cents to $94.84 a barrel on the London-based ICE Futures Europe exchange yesterday. It was the highest settlement since Oct. 1, 2008.
To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net
http://www.bloomberg.com/news/2011-01-03/oil-trades-near-27-month-high-as-economic-recovery-may-boost-energy-demand.html
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