Oil crosses US$90 for the first time in 26 months

Crude for February delivery rose to US$90.48 a barrel, the highest settlement since October 3, 2008. Oil prices crossed US$90 a barrel for the first time in 26 months on a fall in crude inventories in USA amid colder than normal winters. Falling for the third consecutive week, US crude stockpiles fell 5.3 mln barrels last week totaling the past three weeks' declines to 19 mln barrels. This is the biggest three-week drop since 1998. Oil found support from forecasts for cold weather in northern Europe and USA, with U.S. heating oil demand expected to average 4.6% above normal this week. Latest data has shown that US economy has picked up in the third quarter, signaling a more solid pace of recovery and improving oil demand prospects. Prices have found support from an estimated surge in fuel demand growth in Q4-10 to near record levels, with further increases expected in 2011 as the economy improves. US economic data released on Wednesday came in mixed, with gross domestic product growth revised upward to an annualized rate of 2.6% from 2.5%. Sales of previously owned U.S. homes rose in November.
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