Oil rises near $75 as traders eye stocks, dollar
SINGAPORE: Oil prices rose to near $75 a barrel Thursday in Asia as traders looked for guidance from stock and currency markets amid a muddled crude demand outlook.
Benchmark crude for March delivery was up 29 cents at $74.81 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 77 cents to settle at $74.52 on Wednesday.
Oil has zigzagged recently — jumping about 7 percent since touching $69.59 a barrel on Friday after falling from $84 last month — as investors struggle to forecast crude demand amid a sluggish global economy.
Traders have instead been eyeing equity markets and the U.S. dollar. Most Asian stock markets rose Thursday in early trading while the euro rose to $1.3789 from $1.3731 on Wednesday.
Investors often buy commodities such as oil as a hedge against inflation, and a weaker dollar makes crude cheaper for traders holding other currencies.
"We have consistently emphasized a continued weak pace of demand beyond the emerging economies," Galena, Illinois-based Ritterbusch and Associates said in a report. "Extreme price volatility could be expected and a run at last week's highs at the $78 area is certainly possible."
"But, from a longer term view, we still expect fresh lows as we leave open the possibility of a strengthening dollar to new highs."
In other Nymex trading in March contracts, heating oil rose 0.81 cent to $1.955 a gallon, and gasoline was up 0.77 cent at $1.9367 a gallon. Natural gas gained 3.2 cents to $5.324 per 1,000 cubic feet.
In London, Brent crude was up 23 cents at $72.77 on the ICE futures exchange.