Crude oil's run continues

19 October 2009

Wholesale crude oil prices rose on the New York Mercantile Exchange this morning (October 19th), after registering strong gains at the end of last week.

The November-delivery crude oil contract settled at $78.53 (£48.34) a barrel on Friday, with support coming from a wider rally in equities that helped to push the Dow Jones Industrial Average up above 10,000.

Crude oil prices have also been supported by weakness in the dollar, which has made hard assets such as crude, heating oil and gas more attractive to foreign buyers.

In the long term, substantial rises in oil prices are likely to translate to higher domestic heating oil and gas prices as higher buying costs are factored in by suppliers.

In such circumstances, buying in bulk ahead of the peak winter heating oil season may be an effective way to protect against erratic price movements.

Looking at the prospects for crude, Geoff Clear, of Asian commodities at Australian & New Zealand Banking Group, told Bloomberg: "Overall, oil's looking very positive, reacting to a pretty good stream of new economic data coming out of the US."

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