Friday, December 16, 2011

Oil near $96 amid Europe debt, economy concerns

(AP) ? Oil prices rose to near $96 a barrel Thursday in Asia after plunging the previous session on investor pessimism that Europe's debt crisis will trigger a recession on the continent next year.

Benchmark crude for January delivery was up 59 cents to $95.54 a barrel in midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $5.19, or 5.2 percent, to settle at $94.95 on Wednesday.

In London, Brent crude was up 15 cents at $105.17 on the ICE futures exchange.

Crude dropped Wednesday amid growing concerns about slowing global oil demand. The International Energy Agency and the Organization of Petroleum Exporting Countries have recently forecast fuel consumption will grow slightly next year, but some analysts say even those modest expectations may be too optimistic.

Before Wednesday, crude had traded near $100 for the last month after jumping from $75 in October amid signs the U.S. economy is slowly improving.

"The latest demand forecasts from both OPEC and the IEA still look too high and oil prices have further to fall," Capital Economics said in a report. The consultancy expects Brent crude to fall to near $85 by the end of next year.

Investor fears that European leaders may not be able to contain the region's debt woes helped pull the euro down to its lowest level against the U.S. dollar in 11 months Wednesday. A stronger dollar makes crude more expensive for investors with other currencies.

In other energy trading on the Nymex, natural gas rose 0.4 cents at $3.14 per 1,000 cubic feet. Heating oil gained 2.5 cents to $2.86 a gallon and gasoline futures added 2.6 cents to $2.53 a gallon.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2011-12-15-Oil-Prices/id-782d469272d54c1c89a394f63aefec89

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