Tuesday, November 9, 2010

Oil prices march on, New York crude at two-year high


LONDON — Crude oil futures extended recent gains on Tuesday, with New York prices striking fresh two-year peaks, as the International Energy Agency forecast steady demand growth up to 2035.

New York's main contract, light sweet crude for delivery in December, reached 87.63 dollars a barrel -- the highest level since late 2008.

It later stood at 87.51 dollars, which was a gain of 45 cents compared with Monday's closing level.

Brent North Sea crude for December delivery reached a six-month high of 89.02 dollars. It later stood at 88.86 dollars, a gain of 40 cents, in London midday trade.

Oil prices have won ground in recent days owing to a weak dollar and after the US Federal Reserve's decided to inject an additional 600 billion dollars (430 billion euros) into the market to stimulate the world's biggest economy.

The International Energy Agency (IEA) meanwhile forecast that crude prices would grow to 113 dollars a barrel by 2035, despite environmental policies, essentially dooming climate-change goals.

Slightly more than a third of the new demand would come from China's appetite for energy.

Meanwhile, security forces sought to free seven foreign hostages after an oil rig and support vessel were attacked off Nigeria, a key producer and exporter of crude oil.

The hostages taken in the pre-dawn attack on Monday included two Americans, two French, two Indonesians and one Canadian, according to a source with the company that oversees the rig, Afren. Two people were also wounded.

It was unclear whether a ransom had been demanded, as is usually the case with kidnappings in the turbulent Niger Delta region, the heart of Nigeria's lucrative oil industry.

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