Oil prices in longest rally of the year: analyst

November 08, 2010 | 13:00

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Oil prices staged their longest rally this year, extending gains into a seventh day in Asia Monday as a mini employment boom in the US and a second quantitative easing by the Fed pushed prices up, analysts said.

New York's main contract, light sweet crude for December delivery, rose 39 cents to $87.24 a barrel.

Brent North Sea crude for delivery in December gained 40 cents to $88.51.

""For this year, it's the longest rally," Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore, told AFP.

"Oil started to be above 80 dollars for Nymex in early October, we are now into the second week of November and oil has climbed even higher," Shum added.

Data released in the US late Friday showing a mini jobs boom combined with a second wave of quantitative easing measures laid out by the Federal Reserve to fuel the rally, he said.

"The US jobs report that was supportive, the US Federal Reserve's quantitative easing two, both are the factors leading investors to buy oil futures," Shum stated.

The US Labor Department reported a surprising 151,000 non-farm jobs were added in October, snapping a four-month streak of payroll losses and more than double the 60,000 forecast by most analysts.

Oil has since last Wednesday been spurred on by the Federal Reserve's decision to inject an additional $600 billion into the US market in an attempt to stimulate the economy of the world's biggest oil consumer.

Shum was bullish on the prospects for oil in the near term.

"There is a momentum for it to go higher right now," he said.

AFP

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