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Oil Rises as Economy Rebounds and Dollar Falls

October 13, 2009 at 21:37 by Vladimir Vyun

Crude oil climbed to a highest in seven weeks in New York on speculation that the global demand will rise because of economy restoration and a falling dollar. The declining dollar boosted attractiveness of metals and energy as an alternative investment. The dollar fell to $1.4834 (0.4 percent) per euro from $1.4773 yesterday.

Oil is moving not only on dollar dynamics but on equity dynamics as well, as traders are looking at oil more as an investment asset than a consumption asset. Vice president of reasearch at PFGBest said: “Oil is getting most of its cues from outside markets and not from what’s happening in the energy sector. We are focused on $75 right now.”

The economic recession has been masking a larger trend in the demand for oil in developed countries. In fact OECD oil demand has been falling since 2005 long before the beginning of Great Recession.

November delivery for crude oil climbed $0.64 (0.9 percent) to $73.91 per barrel by 13:10 on NYMEX.

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