Oil crosses US$83 for the first time since fall of 2008

07-Jan-10

Benchmark crude rose to US$83.18 on the Nymex, while Brent crude for February delivery in London rose to US$81.47 a barrel on the ICE Futures exchange. A barrel of crude oil has crosses US$83 for the first time since fall of 2008 on a cold snap in the Northern Hemisphere. Snow, ice and wind took their toll on oil prices, along with a dip in the dollar. The dollar has fallen to 3 week lows on divisions among Federal Reserve policymakers over extending a program to bolster the U.S housing industry. According to the minutes of a December, closed-door meeting by the Fed, a "few members" believed that the US$1.25 trillion program to buy mortgage securities from Fannie Mae and Freddie Mac might need to go on past the current cut off date of March 31, 2010. Unexpectedly, a report by the Energy Information Administration showed gasoline stockpiles also gained more than forecast. US commercial crude oil inventories increased by 1.3 mln barrels to 327.3 mln in the week ended January 1. A more modest rise of 200,000 barrels was predicted.