Oil prices rally by more than $1
January 9, 2006
Crude oil prices have rallied by more than $1 a barrel after sinking to four-and-a-half month lows on Thursday.
US light sweet crude jumped $1.42 to settle at $64.21 a barrel, while in London benchmark Brent crude rose $1.59 to $62.72.
Concern over geopolitical factors in the Middle East had helped drive up prices, experts said.
But a rise in the number of investors opting to move into the market was the main factor for the surge, they added.
Analysts added that crude oil contracts had surged by 7% in the first two trading days of the year with more hedge funds and investors opting to try their luck in the market.
New blood
"This has (price rise) absolutely nothing to do with supply and demand," oil market consultant Peter Beutel told Associated Press.
"There's an element of investment money where they could just as easily be trading GM, euros or oil, and those are the people that have come back into the market early in 2006."
On Thursday US figures showing an increase in US oil stockpiles as well as the end of a Ukraine-Russia dispute over energy supplies had helped push crude prices towards the $62 mark in the US.
However, as well as new players deciding to risk joining the fuel market, commentators did add that other factors - such as the cold snap in Europe - would help to keep prices firm.
Brokers have voiced concerns about the situation in Israel following prime minister Ariel Sharon's stroke as well as continuing unrest in Iraq, as possible factors that will hold oil prices near current levels.
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