Brent gains more than $2/bbl on dollar weakness

22 September 2008 09:59  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude futures gained more than  $2/bbl on Monday, amid weakness in the US dollar and with attention still focused on Washington’s $700bn rescue plan to tackle the ongoing financial crisis.

 

At 08:17 GMT, November Brent on London’s ICE futures was trading at $101.75/bbl, up $2.14/bbl on last Friday’s settlement price, having earlier peaked at $101.86/bbl up $2.25/bbl.

 

At the same time, October NYMEX light sweet crude futures were trading at $106.21/bbl, up $1.66/bbl on last Friday’s settlement level, having earlier hit a high of $106.59/bbl up $2.04/bbl.

 

The October NYMEX contract will expire at the close of business on Monday. The November NYMEX light sweet crude contract was assessed at $105.21, up $2.46/bbl.

 

Crude firmed amid concerns over how successful the US rescue plan which will buy back much of the bad debt held by banks and financial institutions will be given the turbulence in the market.

 

The US dollar weakened against the euro in trade on Monday falling below euro 0.6860, its lowest level since early September.

 

Meanwhile, tensions in Nigeria eased to a degree amid news a major militant organisation had issued a unilateral ceasefire on Sunday following a week of attacks on oil and gas facilities which the government said had reduced output by 150,000 bbl/day.

 

However, this development was offset by news that Shell had announced a second force majeure on exports of Nigerian Bonny crude following attacks last week.

 

Elsewhere, supply pressure was expected to ease amid the ongoing restart of oil and gas production and refining facilities in the US Gulf region following the passage of the recent hurricanes, which may limit the upward pressure on prices.

 

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By: James Dennis
+65 6780 4359

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