Oil Rises to a 15-Month High on Cold Weather, Weaker Dollar

Grant Smith and Yee Kai Pin
Bloomberg
Monday , January 11th, 2010

Crude oil rose to a 15-month high as the cold snap stoked demand for heating fuel while a sliding dollar heightened crude’s appeal for hedging inflation.

Oil advanced a second day after a government report yesterday showed that crude imports to China, second-largest energy consumer, climbed to a record 203.8 million metric tons last year. Russia failed to agree on oil supplies to Belarus for 2010 during talks in Moscow on Jan. 9, raising the prospect of a disruption to European imports.

“Oil continues to trend higher this morning as cold weather and a weaker dollar trigger speculative buying,” said Christopher Bellew, senior broker at Bache Commodities Ltd in London. “But once the weather in the U.S. improves, plentiful supplies of physical oil may soon weigh on prices.”

Crude oil for February delivery rose as much as 92 cents, or 1.1 percent, to $83.67 a barrel in electronic trading on the New York Mercantile Exchange. That’s the highest since Oct. 14, 2008. It was at $83.43 a barrel at 9:50 a.m. London time.

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