Oil prices rose Friday after the previous session's decline prompted fresh buying amid expectations that crude futures will continue to test new records because of tight supplies.
Light, sweet crude for December delivery rose 9 cents to US$93.58 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.
The contract on Thursday fell US$1.04 to settle at US$93.49 a barrel after rising as high as US$96.24, a new trading high.
Many investors believe tight supplies will drive crude prices to US$100 a barrel, or higher, and look at price declines as buying opportunities, analysts said.
"The big question that everyone wants to know is will we see US$100 (a) barrel on this run," Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, wrote in a research note. "The strength of this market seems to be gaining momentum and I have learned a long time ago to respect a raging bull."
"But I also know that these type of runs can end quickly and feel like a crash once the sell-off begins," Flynn wrote.
Tetsu Emori, commodity markets fund manager at ASTMAX Futures Co. in Tokyo, said a surge in oil prices to the US$100 level would likely be spurred by factors such as geopolitical threats to supply or declining stockpiles in the United States or Europe.
"Some people want to see (crude hit) the US$100 level, but I don't think that level will be sustainable because it is simply too expensive," Emori said.
Thursday's decline, amid volatile trading, was prompted by concerns about the U.S. economy. France's decision to release oil from its strategic petroleum reserve also motivated investors to cash in some of their recent gains.
The U.S. Commerce Department's report that consumer spending rose by 0.3 percent in September, less than the 0.4 percent increase analysts expected, raised the prospect of a slowing economy that could depress demand for oil. And news about manufacturing came from the Institute for Supply Management, which said industrial activity grew in October at the weakest pace since March.
France decided to release a little more than 2 million barrels of crude from its strategic petroleum reserve to relieve a short-term supply crunch, Dow Jones Newswires reported.
Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on the how the adjustment is calculated, US$38 a barrel then would be worth US$96 to US$103 or more today.
Heating oil futures added 1.01 cents to US$2.5224 a gallon (3.8 liters) while gasoline prices rose 1.13 cents to US$2.3545 a gallon. Natural gas futures fell 2.2 cents to US$8.615 per 1,000 cubic feet.
In London, December Brent crude rose 58 cents to US$90.30 a barrel on the ICE futures exchange.
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