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(04-20) 22:14 PDT BANGKOK, Thailand (AP) –

Oil prices surged above $84 a barrel Wednesday in Asia as stock markets rallied on strong corporate earnings and more airports opened in Volcanic ash stricken Europe, easing fears of dampened demand for crude.

Benchmark crude for June delivery was up 57 cents at $84.42 at midday Bangkok time in electronic trading on the New York Mercantile Exchange. It rose 72 cents to settle at $83.85 a barrel on Tuesday. Trading in the May contract has now shifted to the June contract.

Oil prices had cooled over the last two weeks, tumbling for eight of the past 10 trading days since hitting $87 a barrel earlier this month.

Analysts say the volcanic eruption in Iceland that shut down air traffic in much of Europe since last week cut demand for jet fuel. But flights have now begun landing in cities such as London and Paris though some European airports remained shut.

Also boosting sentiment in oil markets were gains in Asian stocks after Goldman Sach’s first-quarter corporate profit numbers overshadowed ongoing concern about fraud charges against the investment bank. Apple Inc., meanwhile, shattered expectations with a 90 percent leap in net profit for the most recent quarter, boosting technology shares.

In other Nymex trading in May contracts, heating oil rose 1.5 cents to $2.195 a gallon and gasoline gained 1.4 cents to $2.295 a gallon. Natural gas fell 0.9 cent to $3.966 per 1,000 cubic feet.

In London, Brent crude’s June contract was up 57 cents at $85.37 on the ICE futures exchange.

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(03-31) 23:47 PDT SINGAPORE (AP) –

Oil prices fell to near $83 a barrel Thursday in Asia after a weakening U.S. dollar helped crude surge to a 17-month high the previous day.

Benchmark crude for May delivery was down 41 cents to $83.35 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

The contract climbed by $1.39 to settle at $83.76 on Wednesday, the highest settlement since October 2008, as the U.S. currency weakened, making commodities such as oil cheaper for investors with currencies other than dollars.

The euro was steady at $1.3510 on Thursday.

Oil prices have jumped from $69 a barrel in early February on investor expectations that a gradual recovery in the U.S. economy this year will eventually boost crude consumption.

So far, demand remains sluggish. The Energy Information Administration said crude inventories rose by 2.9 million barrels last week, slightly more than analysts expected.

“A good portion of the buying seems to have come on ‘good vibrations,’ the vague sense that the economic recovery is gaining momentum, and that that should lead to heavier demand for oil products,” consultancy Cameron Hanover said in a report.

Trading volume was low ahead of the Good Friday holiday, when global oil trading will be closed.

In other Nymex trading in April contracts, heating oil fell 1.20 cents to $2.167 a gallon, and gasoline slid 1 cent to $2.297 a gallon. Natural gas was steady at $3.870 per 1,000 cubic feet.

In London, Brent crude was down 32 cents at $82.38 on the ICE futures exchange.

During Monday’s trading in London, US crude touched $79.12 a barrel before falling back later to $78.77.

Heating oil futures led the gains, while London Brent crude rose by more than a dollar to $77.32 a barrel.

Prices rose following forecasts of colder weather in the United States, and the expectation of increased consumption and falling reserves.

That would indicate that demand was rising and signal an improvement in the US economy.

The north-west of the US is also the world’s largest heating oil market.

On Thursday last week, benchmark crude rose $1.38 to settle at $78.05. Oil markets were closed on Friday for Christmas.

Falling supplies?

Inventory figures detailing the amount of oil held in stock are expected later this week from the Energy Information Administration.

News of low stock levels could push oil prices above $80 a barrel by the end of the year, according to Clarence Chu, a trader with Hudson Capital Energy in Singapore.

Better employment figures in the US last week also helped to lift hopes of economic recovery and raised expectations of stronger consumer spending and oil consumption.

China’s central bank surprised markets by raising the interest rate in a three-month bill auction, which the markets took as a signal of policy tightening, putting pressure on commodities and clipping 10 straight days of gains for oil.

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China triggers sell-off: http://link.reuters.com/vys32h

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China’s rapidly expanding economy and its burgeoning thirst for oil has been seen as one of the main reasons crude prices have more than doubled in the past 12 months, despite the lingering impact of the economic crisis.

U.S. crude for February delivery fell 45 cents to $82.73 a barrel by 11:35 a.m. EST (1635 GMT), off Wednesday’s 15-month high of $83.52. London Brent crude fell 45 cents to $81.44 a barrel.

‘Crude oil edged lower on speculation that China’s move to slow bank lending may reduce commodity demand in the country,’ Addison Armstrong, analyst at Tradition Energy in Stamford, Connecticut, said in a note.

Crude had shrugged off news of higher U.S. oil inventories on Wednesday to post its 10th straight session of gains, extending a near $11 rally on expectations freezing temperatures across much of the United States would eventually cut into bulging stocks.

Arctic winds have pushed down into the Northern Hemisphere, freezing Europe and parts of Asia, and boosting demand for heating in the United States by some 21 percent above normal.

European energy demand has also surged, especially in Britain and France, while heavy snow and record low temperatures in China prompted cities across eastern and central parts of the country to begin rationing power.

Analysts said investment flows from funds at the beginning of the new year were also likely to be responsible for part of the recent rise in prices.

‘We still fail to see any compelling fundamental reason why crude oil prices are where they are. The weather is cold, but it was also cold at this time last year when prices plunged to $33 a barrel,’ MF Global analyst Edward Meir said.

‘We suspect a more logical reason for the rally has to do with the fact that, egged on by a struggling dollar and a benign interest rate environment, money is flowing into commodities at a heady pace.’

U.S. RECOVERY

The number of U.S. workers filing new applications for unemployment insurance rose less than expected last week, the Labor Department said on Thursday.

Monthly non-farm payrolls data on Friday will give further indication of the pace of recovery in the world’s largest energy consumer. James Bullard of the St. Louis Federal Reserve Bank said the economy is close to the point where unemployment will start to fall.

Oil markets have been looking to wider economic data for positive signs that could boost energy demand.

Price support also came from the continuing talks between Belarus and Russia over the supply of Russian oil for 2010.

Belarus has insisted Russia should continue billions of dollars in oil subsidies, complicating talks aimed at resolving a dispute over a pipeline that brings 10 percent of Europe’s crude. Russia’s energy minister said talks were continuing on Thursday.

(Reporting by Matthew Robinson, Robert Gibbons and Gene Ramos)

(Additional reporting by Jennifer Tan in Singapore; Editing by Lisa Shumaker) Keywords: MARKETS OIL

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