Business | Oil & Gas

Oil rises above $100 amid broad market rally

Oil rose to over $100 (Dh367) on Thursday as a move by global central banks to add liquidity to money markets rallied world stocks and the United States energy sector struggles to restart operations shut by Hurricane Ike.

  • Agencies
  • Published: 23:36 September 18, 2008
  • Gulf News

London: Oil rose to over $100 (Dh367) on Thursday as a move by global central banks to add liquidity to money markets rallied world stocks and the United States energy sector struggles to restart operations shut by Hurricane Ike.

US crude was up $2.41 at $99.57 a barrel at 1420 GMT, after touching a high of $102.24 earlier, adding to a $6 gain on Wednesday. London Brent crude rose $2.28 to $97.12 a barrel.

The strife on financial markets this week had pushed crude down 10 per cent on Monday and Tuesday as investors fled oil for saver havens.

The world's top central banks announced yesterday they would pump more than $180 billion in extra dollar funds into global money markets in a coordinated effort to ease the growing funding squeeze, driving up global stocks and bolstering oil.

"Most of the big moves at the moment are financial market-related rather than related to the fundamentals. A bit of weakness in the dollar seems to have pushed prices higher right now," said Tony Machacek, a broker at Bache Commodities.

Investors flocked to oil and other commodities earlier this year as a hedge against the weak dollar, sending crude to a peak over $147 in July before slowing demand in the United States and other consumer nations sent prices tumbling. Hurricane Ike toppled several platforms in the Gulf of Mexico and 12 refineries along the Gulf Coast remain shut following the storm.

Rising tensions in Nigeria's crude rich Niger Delta region have heightened supply concerns, with militants threatening on Wednesday to broaden their "oil war" to offshore oilfields.

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