Thursday May 28, 03:32 PM
Oil price soars to six-month highs
LONDON, May 28, 2009 (AFP) - Oil prices soared above 64 dollars on Thursday, hitting the highest since early November on the back of a weak dollar, upbeat US economic data and OPEC's decision to hold output unchanged.
New York's main futures contract, light sweet crude for delivery in July, jumped as high as 64.19 dollars per barrel, a level last seen on November 10.
London's Brent North Sea crude for July hit 63.38 dollars, a price last witnessed on November 5.
In midday trade earlier, New York was quoted up 10 cents to 63.55 dollars, with Brent also up 10 cents to 62.60 dollars.
The price gains came as the US currency dropped sharply against the euro. A weaker dollar makes dollar-priced oil cheaper for foreign buyers -- which in turn encourages crude demand.
The dollar was pushed lower on Thursday by official data which showed that orders for US manufactured durable goods jumped higher than expected in April.
New orders were up 1.9 percent to 161.5 billion dollars -- the second increase in the past three months, the Commerce Department said.
In addition, new US unemployment claims fell 13,000 to 623,000 in the past week, the Labor Department said, a larger than expected decline.
In reaction, the euro rose as high as 1.3957 dollars in late afternoon London trade on Thursday from 1.3868 dollars late on Wednesday. The dollar is regarded as a safe-haven asset and performs well amid economic uncertainty but strong data encourages investors to take on greater risk and look elsewhere.
Earlier Thursday, the OPEC crude exporters' group decided to maintain current output levels as expected.
Ministers from the Organization of Petroleum Exporting Countries (OPEC) kept its output target steady at 24.84 million barrels per day. OPEC pumps about 40 percent of the world's oil.
Traders were meanwhile awaiting the latest report on US energy (USEG - news) inventories for the week ending May 22.
The release from the US government's Department of Energy is due one day later than normal because of a public holiday on Monday.
The recession-hit United States is the biggest energy consuming nation in the world, followed by number two China.
Oil has raced higher this week on growing expectations of a global economic recovery which would stoke demand, traders said.
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