Shanghai fuel oil futures rose 2.54 percent, the biggest one-day
price surge since mid October, tracking the rocketing international
crude oil prices, which touched their historic high of $99.23 in
electronic trading.
The most actively traded fuel oil futures contract for March
delivery on the Shanghai Futures Exchange, SHFE, climbed 96 yuan,
or 2.54 percent, to close at 3,878 yuan per ton. The most actively
traded crude oil futures contract for January delivery on the New
York Mercantile Exchange, NYME, recorded $99.23 a barrel before it
dipped slightly to $98.6, continuing its four day price surge
beginning last Friday.
Analysts said the uncertainties overhanging US economic growth
meant more investors seeking refuge in the global energy
market.
"Concerns about a further weakening of US dollar help push up
the global oil price, because investors are looking to energy to
hedge against the weak currency," said Lin Hui, an analyst at the
futures company Orient Securities.
At a summit held last weekend, the Organization of Petroleum
Exporting Countries, OPEC, did not express intentions to increase
production in the near future, which analysts claimed was a factor
triggering the oil price jumps that began on Monday.
The supply and demand fundamentals were tightened by increased
demand for heating oil in US, as the country expects a colder
winter this year, analysts said.
Traders and analysts expect oil prices to increase further in
the coming winter months when real demand starts to deplete
existing inventories.
"After reaching the $100 psychological barrier, the world oil is
expected to break through $120 in the following months," Lin
added.
A December 5 OPEC meeting will decide whether to increase output
at a time when the US dollar is falling. Leaders of some OPEC
members have already complained about what they consider
under-valuation of the commodity.
(China Daily November 22, 2007)
