Oil jumps to 2009 high before retreatingOil prices jumped above $79 a barrel to a 2009 high today before falling back as investors looked to the corporate earnings of big U.S. retailers this week for signs consumers may be regaining confidence.
By: Pablo Gorondi, Associated Press
Oil prices jumped above $79 a barrel to a 2009 high today before falling back as investors looked to the corporate earnings of big U.S. retailers this week for signs consumers may be regaining confidence.
By midday in Europe, benchmark crude for November delivery was down 15 cents at $78.38 in electronic trading on the New York Mercantile Exchange. Earlier in the session, it rose as high as $79.05. The contract added 95 cents to settle at $78.53 on Friday.
Last week, crude broke out of a five-month trading range between $65 and $75 a barrel on a weakening U.S. dollar and expectations that oil demand will eventually recover as the global economy grows next year. A growing economy increases demand for energy.
Despite several straight days of gains by oil prices, analysts remained cautious.
"The spectacular gains were overwhelmingly driven by financials and market optimism rather than fundamentals, said JBC Energy in Vienna. "We see no reason why prices should not return to the $65-$75 per barrel bandwidth."
JBC cited considerable spare output capacity at OPEC, low profit margins for refiners, a massive stock surplus of products such as diesel and heating oil and lackluster demand among industrialized nations among the "bearish fundamentals" weighing on the market.
"The move from $75 to $78 has been done ... without any real fundamental development," said Olivier Jakob of Petromatrix in Switzerland. "This is a very technical market and technical markets fall as fast as they rise."
Investors will be eyeing third quarter results from retailers this week for clues about the strength of the U.S. consumer. Apple Inc., McDonald's Corp., appliance maker Whirlpool Corp. and toy maker Hasbro Inc. are among those reporting this week.
The euro gained today to $1.4940 from $1.4899 late Friday while the dollar fell to 90.67 Japanese yen from 90.85 yen.
In other Nymex trading, heating oil fell 0.61 cent to $2.0236 a gallon. Gasoline for November delivery lost 1.35 cents to $1.9658 a gallon. Natural gas for November delivery was steady at $4.781 per 1,000 cubic feet.
In London, Brent crude for December delivery fell 19 cents to $76.80 on the ICE Futures. exchange.
Associated Press writer Alex Kennedy in Singapore contributed to this report.