US crude surges $3.49/bbl on market rally

13 October 2008 21:13  [Source: ICIS news]

HOUSTON (ICIS news)--NYMEX light sweet crude futures for November delivery settled at $81.19/bbl on Monday, up $3.49 as it joined other commodities and global stocks, which soared in response to a plan to rescue the banking sector.

Crude prices were in oversold territory following Friday’s plunge to a 13-month low and market participants were searching for a comfort level.

November crude established an overnight low of $79.45/bbl and received support from a softer US dollar, rising to $82.52/bbl. It then consolidated between that range before retreating off the highs ahead of the close.

Even though the credit markets were showing signs of loosening up, energy demand was expected to be affected by the financial crisis. Investment bank Goldman Sachs lowered its price forecast for crude oil, suggesting it could fall to around $70.00/bbl by the end of this year, compared with an earlier forecast of $115.00/bbl.

OPEC was expected to hold an emergency meeting in Vienna on 18 November to discuss the impact on the financial crisis and various oil ministers have been making noises to cut supplies if demand for oil falls.

ICE Brent for November delivery topped out at $78.42/bbl and settled at $77.46/bbl, up $3.37 from Friday.

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By: Ignacio Sotolongo
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