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Oil ends 2010 up 12 per cent
LONDON—Crude oil was set to close the year up more than 12 per cent despite a slight decline yesteray, due to a resurgence in global demand, an unusually cold winter and falling inventories. Crude was also on track to average $79.60 a barrel for the year, second only to 2008’s record average of US$99.75. US crude slipped just below US$90 yesteray as year-end profit-taking outweighed positive economic data and a drawdown in crude inventories reported in weekly US government data. US RBOB gasoline futures were higher, buoyed by holiday driving demand and lower inventories on the last trading day of the year, and during which refined products futures contracts will expire.
NYMEX crude oil for February delivery fell 71 cents, or 0.79 per cent, to US$89.13 a barrel at 9:30 am EST yesterday. ICE Brent crude fell 84 cents to US$92.25. Strong demand for raw materials, especially in China, is expected to push oil even higher next year, analysts said, although cautioning the global recovery was still fragile. US crude stocks fell for the fourth straight week last week, but the drawdown was less than expected and put downward pressure on prices. But the fall in gasoline stocks was much bigger than expected on year-end holiday travel demand, possibly signaling rising consumption as the world’s largest economy recovers from recession. Including all products, the total US implied demand has risen to the highest level of the year and above the levels of 2008, said Olivier Jakob from Petromatrix.
It was, however, soaring demand in Asia that analysts said contributed most to healthy gains in oil and commodities in 2010. Prices in metals and soft commodities also beat records or climbed near multi-year highs. Chinese President Hu Jintao said Friday the global recovery would remain difficult but China would work to ensure that its economic growth is stable and fast next year. The Reuters-Jefferies CRB index of 19 commodities is up 16 per cent on the year, a more attractive return than on stocks. However, some analysts have cautioned against excess optimism about a continuation of the rally in 2011. (Reuters)
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