Oil rises further, NY crude above 78 dollars

Oil rose above 78 dollars in Asian trade Friday as sentiment remained upbeat after the latest US government data showed an increase in petrol demand, analysts said.

   
New York's main contract, light sweet crude for November delivery rose 46 cents to 78.04 dollars a barrel.
   
Brent North Sea crude for December delivery gained 41 cents to 76.64 dollars a barrel.
   
The two contracts had closed higher Thursday with New York crude finishing at 77.58 dollars, its highest level since October 14, 2008 in reaction to the data from the US Department of Energy.
   
The DoE's weekly report issued Thursday showed gasoline stocks fell 5.2 million barrels last week. Analysts polled by Dow Jones Newswires had expected a rise of 700,000 barrels.
   
The fall in gasoline stocks indicates rising demand and tightening supplies, supporting prices.
   
Crude reserves rose by 400,000 barrels last week, lower than most analysts' expectations of 600,000 barrels.
   
"Despite a mixed demand picture, falling supply is helping tighten US inventories," analysts at Morgan Stanley said in a note to clients.
   
Crude prices have been steadily climbing higher in recent trading sessions, buoyed by a weak US dollar that has bolstered investor risk appetite for hard assets such as oil and other commodities to protect their wealth from the slumping greenback.
   
With a weaker dollar, investors holding stronger foreign units find it cheaper to buy crude which is priced in the greenback.
   
In Thursday trading, the euro briefly hit a high of 1.4968 dollars, its best level since August 2008 but later slipped back to 1.4941 dollars at 2100 GMT from 1.4922 dollars in New York late on Wednesday.
   

Source: AFP

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