Oil Prices Head For Biggest Weekly Gain

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Crude oil prices headed for its biggest weekly rally in almost two months over the weekend, after the United States’ economic reports indicated that growth in the world’s biggest crude consumer will accelerate.

Crude for February delivery was at $99.89 a barrel, up 36 cents, in electronic trading on the New York Mercantile Exchange at 9:14 a.m. London time. The contract, on Thursday, rose 86 cents to $99.53, the highest settlement since December 13. Futures have climbed 9.3 per cent this year after increasing 15 per cent in 2010.

Brent oil for February was trading at $108.09 a barrel, up 20 cents, on the London-based ICE Futures Europe exchange. The European contract’s premium to Nymex crude was $8.19 a barrel, compared with a close yesterday of $8.36 that was the smallest differential since March 8. The spread surged to a record $27.88 on October 14.

Futures rose as much as 0.6 per cent, extending yesterday’s gain of 0.9 per cent after U.S. initial jobless claims dropped to the lowest level since April 2008. Leading indicators climbed more than forecast in November, and consumer sentiment improved this month. Oil supplies fell the most in a decade last week, the Energy Department said December 21.

“There’s better economic news, slightly better sentiment out of the U.S., and that obviously has a big impact on crude- oil prices,” said Gavin Wendt, senior resource analyst at Mine Life Pty in Sydney.