Oil jumps above $73 on dollar fall Nigeria attack

June 30, 2009 | By admin |

SINGAPORE — Oil prices jumped above $73 a barrel Tuesday in Asia as a weakening US dollar and attacks on oil installations in Nigeria helped push prices to eight-month highs.

Benchmark crude for August delivery was up $1.06 to $72.55 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange after trading as high as $73.38. On Monday, it gained $2.33 to settle at $71.49.

Oil has surged from below $35 in March in part on investor concern that massive US fiscal stimulus spending will eventually spark high inflation. Investors often buy commodities such as crude as a hedge against a weakening dollar and inflation.

The euro gained to $1.4108 on Tuesday from $1.4078 on Monday.

Prices were also bolstered by another round of attacks Monday by Nigerian militants, who this time partly damaged and shut down a Royal Dutch Shell offshore oil platform. Nigeria is Africa’s largest oil producer.

Crude trading volume was about three times more than normal Tuesday in Asia, said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore.

China boosted state-set gasoline and diesel prices Tuesday to reflect rising global crude costs, days after indicating plans to increase its strategic crude oil reserves by 60 percent over the next five years.

The government raised the retail price of gasoline by 8.6 percent and diesel by 9.6 percent, the fourth change in prices this year.

Crude reached $73.23 a barrel in intraday trading earlier this month, the highest since October.

In other Nymex trading, gasoline for July delivery rose 2.73 cents to $1.96 a gallon and heating oil gained 2.65 cents to $1.81. Natural gas for July delivery jumped 2.4 cents to $3.97 per 1,000 cubic feet.
source
In London, Brent prices rose $1.31 to $72.30 a barrel on the ICE Futures exchange. - AP