Oil hits eight-week high as investments rise Crude oil rose to...

Oil hits eight-week high as investments rise



Crude oil rose to an eight-week high as investors purchased oil and fuel futures amid returns that have outpaced other securities.

"The financial flow may soon send prices to $US85, even if that's not justified by physical demand," said Kyle Cooper, a managing director at energy consultant IAF Advisors in Houston. "You're seeing a lot of money move into the market."

Oil has advanced 80 per cent over the past year, greater than the Dow Jones Industrial Average's 59 per cent increase. Futures traded in a $US1.66 range today, drifting between gains and losses, as equities and the dollar fluctuated.

Crude oil for April delivery increased 37 US cents, or 0.5 per cent, to $US81.87 a barrel on the New York Mercantile Exchange, the highest settlement price since Jan. 11.

Brent crude for April delivery rose 58 US cents, or 0.7 per cent, to $US80.47 a barrel on the London-based ICE Futures Europe exchange, the highest settlement since Jan. 11. Brent is trading at a $US1.40-a-barrel discount to the New York contract, the narrowest level since Feb. 18. A shrinking differential may discourage shipments to the US from the North Sea.

"There's well-entrenched bullish sentiment here," said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. "We will tend to see prices increase if we don't have a decisively bearish story."

Bloomberg