Average price of oil 77.50$/barrel in 2010 & Oil edges up on weaker dollar

25. January. 2010
Reuters

Oil prices rose slightly on Monday, as the market weighed a weaker dollar and Wall Street's higher open against continuing signs of weak demand.

Still, oil prices were near a one-month low of $74 a barrel after having fallen by almost $10 a barrel over the last two weeks since hitting a 15-month peak of $83.95 on January 11.

U.S. crude for March delivery rose 12 cents to $74.66 a barrel by 12:41 p.m. The contract fell $1.54 to settle at $74.54 a barrel on Friday, the lowest settlement since December 22, after trading as low as $74.01.

London ICE Brent rose 36 cents to $73.19.

"Crude and products futures are little changed in New York this morning on moderate overnight volume as the weak dollar supports the markets and prevents further selling," Addison Armstrong, analyst at Tradition Energy in Stamford, Connecticut, said in a research note.

The dollar was broadly weaker on Monday. A weak dollar tends to support commodities priced in dollars as they become cheaper for holders of other currencies.

Wall Street opened higher on Monday after a three-day slide at the end of last week, bolstered by the view that U.S. Federal Reserve Chairman Ben Bernanke may be confirmed for a second term. .N

U.S. stocks pared their early gains slightly on data showing sales of previously owned U.S. homes fell at the fastest pace on record in December.

Despite Monday's support from oil prices, demand for oil remains relatively weak in the wake of the financial crisis.

Milder weather in the U.S. Northeast, the world's top heating oil market, will add to that weakness this week.

U.S. heating oil demand will be 2 percent below normal, a report from the U.S. National Weather Service said.

Oil prices have broken below the 100-day moving average of around $75.25, a key indicator of market sentiment which measures the average price of oil over the last three months.

U.S. crude oil is expected to rise to an average of $77.50 a barrel in 2010, a Reuters poll of 29 market analysts showed, up from $76.40 a barrel in December.

An oil spill in Texas' Sabine-Neche Waterway blocked seaborne supplies to four Texas refineries representing 6.5 percent of U.S. capacity over the weekend.

Texas officials said the clean-up of the 11,000 barrels of oil was underway. The spill is the biggest in Texas since 1994.

Separately, Mexico closed its Dos Bocas oil terminal on Sunday due to bad weather, the government said. Almost all of Mexico's crude oil exports are shipped to refineries on the Gulf Coast of the United States.