Oil near $ 92 a barrel on weak dollar

Thursday, 20 January 2011 00:01 - - {{hitsCtrl.values.hits}}

Singapore (Reuters): U.S. crude rose to near $92 a barrel on Wednesday, boosted by a fall in the dollar to two-month lows, while Brent crude extended gains on worries over a supply crunch.

The discount for U.S. crude futures benchmark West Texas Intermediate (WTI) against Brent remained strong at more than $6 a barrel, but below the $8 level hit before the February Brent contract expired last Friday.

But gains in U.S. crude could be capped by the impending restart of Alaska’s main oil pipeline after a shutdown, as well as a suggestion by the International Energy Agency that OPEC may have raised output in response to high oil prices.

On the other hand, Brent prices have been buoyed by concerns over disruptions in North Sea crude supplies.

“We don’t expect any drastic price movements today -- there’s a bit of holiday mood still in crude, with trading volumes still fairly low, and the market is in a consolidation mode,” said Matthew Lewis, an analyst at CMC Markets in Sydney.

“For WTI, at around $91, you will probably see some rebound.”

U.S. crude for February delivery rose 48 cents to $91.86 a barrel by 5:30 a.m. EST, after settling down 16 cents at $91.38 a barrel on Tuesday. The February contract expires on Thursday.