Oil Eyes Biggest Annual Percentage Jump Since 1999

December 31, 2009

NEW YORK–Oil rose towards $80 a barrel in thin holiday trade Thursday, poised for the biggest annual climb in a decade, a year after posting huge falls as the global economic crisis sapped demand.

Crude was supported by data from the U.S. Energy Information Administration (EIA) that showed declines in crude oil stockpiles last week, boosting expectations of demand recovery in the world’s largest energy user.

U.S. crude for February delivery rose 61 cents to $79.89 a barrel by 12:33 a.m. EST (1733 GMT), its seventh straight session of gains. Prices have risen 14 percent in just over two weeks.

London Brent crude rose 57 cents to $78.60.

“Momentum seems to run out near $80 as market participants ponder the conundrum of whether or not a sustainable recovery is actually underway,” Mike Fitzpatrick, vice president at MF Global in New York, said in a note.

U.S. oil futures were on track for the sharpest annual percentage gain since 1999 but remained almost half the all-time high of $147.27 hit in July 2008.

After sliding to a five-year low under $33 at the end of 2008, oil prices staged a steady climb to a high of $82 in October this year. The annual average 2009 price was $62, broadly in line with analysts’ predictions at the end of 2008 of $58.48.

Oil’s near 80 percent rise this year was part of a broad-based rally across commodities and equities as investment returned to markets drained by the global economic recession.

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