Crude oil futures increase to 25 months ago in New York as Dollar Falls

Crude oil rose to its highest level in 25 months, while the dollar fell, increasing the appeal of commodities as an alternative investment.

Oil jumped 1.4 percent in the dollar index fell to its lowest level since Nov. 23 after U.S. employers added fewer jobs than expected in November. The unemployment rate rose unexpectedly. Futures for delivery from 2013 to 2018 fell below the price of the current month.

"The increase is due to a dollar much lower," said Hamza Khan, an analyst of Schork Group Inc., a consulting firm in Villanova, Pennsylvania. "This is not based on fundamentals."

Crude oil for January delivery rose $ 1.19 to settle at $ 89.19 a barrel on the New York Mercantile Exchange, the highest closing price since Oct. 7, 2008. Futures rose 6.5 percent this week and 12 percent this year.

Oil futures for delivery in March 2012 decreased as the shorter-term contracts rose, a sign that the participants are betting on reducing the slope of a price increase in the coming years. The long-term contracts moved to a market structure known as backwardation.

"The movement has been working for a while, and that's what you expect when the fundamentals are tightening," said Costanza Jacazio, commodities analyst at Barclays Capital in New York. "Since the end of September we have seen a major redesign. The trend has changed."

Dollar Index

The dollar index, which is the currency against six others, fell 1.1 percent, the most since October 20, 14:38 in New York. The U.S. currency fell 1.2 percent to $ 1.3371 per euro, compared with $ 1.3209 yesterday.

The Thomson Reuters / Jefferies CRB Index of 19 raw materials advanced 1.3 percent to 316.16, the strongest level since 10 November. Fifteen of the commodities increased.

"The rally continues, with $ 90 now in sight," said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. "We shrugged off the unemployment figures because of the way in which the dollar reacted to it."

U.S. payrolls increased 39 thousand less than the most pessimistic forecast of economists surveyed by us, according to Labor Department figures released today in Washington, a fuel demand signal may be slow to recover. The unemployment rate rose to 9.8 percent, the highest since April, the Labor Department figures showed today.

Fuel Consumption

Fuel consumption U.S. decreased 1.8 percent in the week ended on Nov. 26 to 18,500,000 barrels, the lowest since the seven days that ended on 15 October an Energy Department report this week showed. It was the third weekly decline.

"When the market does not sell on bearish news, it shows that there is a kind of inner strength there," said Matt Smith, a commodities analyst at Summit Energy in Louisville, Kentucky.

The index of the Institute for Supply Management non-manufacturing, which covers about 90 percent of the economy, rose to 55 in November from 54.3 the previous month. A reading above 50 signals growth.

Oil extended gains, touching $ 89.33 a barrel in intraday trading after breaking support at $ 88.63, the highest of 11 November.

"Some of it is just the ongoing bull market sentiment only briefly influenced by the employment report," said Tim Evans, energy analyst at Citi Futures Perspective in New York. "The softer U.S. dollar is one approach, although it has been a real argument of convenience. We are not implemented in any consistent manner."

$ 120 oil

Oil advances to $ 120 a barrel before the end of 2012 as consumption grows in emerging economies, according to a report today by JPMorgan Chase & Co.

Crude futures in New York will average $ 93 a barrel next year, compared with a previous estimate of $ 89.75 and London Brent crude will average $ 95 a barrel, compared with an earlier assessment $ 91.75, the bank's analysts forecast.

"Strong growth in oil demand emerging in the next 24 months is likely to pick up the call on OPEC production levels last seen at the top of the rise in oil prices in 2008," analysts led by Lawrence Eagles in New York, said.

The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global supplies is unlikely to increase production in the first half of next year unless prices increase by $ 100 a barrel, said analysts. oil ministers of OPEC meeting Dec. 11 in Quito, Ecuador.

Brent crude oil for January settlement on the ICE Futures exchange in London, Europe won 73 cents, or 0.8 percent, to $ 91.42 a barrel. Earlier, it reached a maximum of two years of $ 91.85 a barrel.

volume of oil in electronic commerce on the Nymex was 756,029 contracts in New York 14:42. Volume was 712,492 contracts yesterday, 2.7 percent above the average of the last three months. Open interest was 1.37 million contracts.