Oil in double-digit zone

OIL WATCH

Global crude oil prices appeared set to break into double-digit zone with the Nymex hitting $100.10 a barrel this evening, Bloomberg data showed.

Nymex last traded below $100 a barrel on April 2 this year. Brent prices fell to $95.93 a barrel at 8.30 PM (IST). Crude oil prices fell as the dollar gained against the euro, reducing the appeal of commodities as a hedge.

Oil dropped after the dollar rose to a one-year high against the euro on speculation that growth in Europe will slow more than in the US Investors looking to hedge against the dollar's decline helped lead crude oil and other commodities to records earlier this year.

Hurricane Ike was set to miss platforms off the Louisiana coast as it passes through the US Gulf.

"The sentiment in the market is very negative at the moment since demand for oil and commodities has declined sharply,'' said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. "Quite a lot of investors are pulling out of commodities.''

Crude has fallen about 30 per cent from a record $147.27 a barrel on July 11 as high prices and slowing global economic growth reduce demand for fuels. The International Energy Agency lowered its 2008 oil demand forecasts yesterday, citing an expectation of weakening fuel consumption in the US, the world's biggest gasoline consumer.

Hurricane Ike's eye was 620 miles (995 kilometers) east of Brownsville, Texas, and moving west-northwest at 9 miles per hour, the National Hurricane Center said in an advisory at 4 a.m. Houston time on Thursday. Ike strengthened to a Category 2 hurricane with sustained winds of 100 mph, up from 80 mph yesterday. The storm is forecast to sweep through the center of the Gulf, missing the offshore Louisiana oil and natural gas fields.

The agency estimates that as much as 96 percent of Gulf of Mexico oil production, and 73.1 per cent of natural gas output, is shut. That is about 1.25 million barrels a day of oil and 5.4 billion cubic feet a day of gas.

Oil's decline led the Organization of Petroleum Exporting Countries to say this week it will try to limit production.

Indian basket at $97.18 a barrel

The Indian crude oil basket on Wednesday continued its downturn and slipped to $97.18 per barrel (about Rs 4,400), its lowest in five months according to data released by the petroleum and natural gas ministry showed on Thursday. The crude basket Wednesday fell $1.82 from the previous day.