Oil Jumps Above $70 on Demand Optimism
{{#rendered}} {{/rendered}}Oil prices leapt above $70 a barrel Monday in Asia on investor expectations a recovering global economy will boost crude demand.
Benchmark crude for September delivery was up $1.12 to $70.57 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, the contract rose $2.51 to settle at $69.45.
Oil prices seesawed last week before surging Thursday and Friday as investors bet that crude demand, which has been tepid this summer, will eventually pick up as the economy improves.
{{#rendered}} {{/rendered}}"Optimism for economic recovery is fighting the weak fundamentals, and right now the optimism is holding the upper hand," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Crude also has followed gains in global stocks. Most Asian indexes rose Monday.
Prices may test an eight-month high of $73.23 a barrel in the coming days, but dismal consumer sentiment in the U.S. will likely weigh on demand and send prices back into the $60s, Shum said.
{{#rendered}} {{/rendered}}"It will be difficult for oil prices to sustain in the $70s given the weak fundamentals," he said.
Mohammad Ali Khatibi, Iran's governor to the Organization of Petroleum Exporting Countries, said Sunday he expects crude prices to reach $80 a barrel by January, the oil ministry said.
In other Nymex trading, gasoline for August delivery rose 1.84 cents to $2.03 a gallon and heating oil gained 2.72 cents to $1.86. Natural gas for August delivery fell 1.7 cents to $3.64 per 1,000 cubic feet.
{{#rendered}} {{/rendered}}In London, Brent prices rose 93 cents to $72.64 a barrel on the ICE Futures exchange.