January 06, 2009 |
|LONDON – Crude-oil futures climbed above the psychologically important $50 a barrel mark Tuesday, spurred by concerns that a reduction in Russian natural-gas flows to Europe could spark increased demand for oil products for heating and power generation purposes.|
Nymex light, sweet crude hit $50.04 a barrel, its highest since Dec. 15, while ICE Brent crude reached $51.40 a barrel, its highest since Dec. 1.
Eastern and southern European countries saw deeper cuts in natural-gas imports from Russia Tuesday after energy company OAO Gazprom reduced supplies transiting Ukraine bound for Europe, as the gas dispute between Russia and Ukraine deepened.
"The flow of gas to southern Europe is getting worse apparently and a solution needs to be quickly found otherwise you will see an impact on oil because the lost supplies on natural gas will need to be replaced by fuel oil, by heating oil and by naphtha," said Olivier Jakob, managing director of Swiss consultancy Petromatrix.
In morning trading, the front-month February Brent contract on London's ICE futures exchange was up $1.34 at $50.96 a barrel.
The front-month February light, sweet, crude contract on the New York Mercantile Exchange was trading 84 cents higher at $49.65 a barrel.
The ICE's gasoil contract for January delivery was up $34.50 at $513.25 a metric ton, while Nymex gasoline for February delivery was up 178 points at 120.02 cents a gallon.
By NICK HEATH