Crude oil inches higher...Rises for 5th straight day

Oil prices climbed for a fifth straight day in London trading on Friday, spurred by continuous spell of bitter cold weather in the northern hemisphere and persistent signs of a gradual pick-up in the crucial US economy. Brent crude climbed to its highest since October 2008. Oil was all set to post its longest winning streak in six weeks with prices trading near the highest level in two years.



Brent crude oil for February settlement rose as much as 49 cents, or 0.5%, to US$94.74 a barrel on the London-based ICE Futures Europe exchange, the highest since Oct. 2, 2008. It traded for US$93.90 a barrel at 11:12 a.m. London time. Prices have gained 2.4% this week, and 20 percent this year. West Texas Intermediate (WTI) oil for February delivery advanced US$1.03 to US$91.51 a barrel yesterday on the New York Mercantile Exchange, the highest settlement since Oct. 3, 2008. Prices are up 15% this year. Electronic and floor trading was closed on Friday because of the Christmas holiday.

Crude oil futures spiked following news of plunging US crude reserves as demand in the world's biggest oil-consumer rises. A slew of economic statistics released reinforced a growing view that the world's largest economy is on course for a steady recovery. Investor sentiment was also buoyed by severely cold weather in Europe as well as the US, which tends to boost demand for heating fuel. The cold snap that has gripped much of Europe and the US in the past weeks has seen gas prices rise to record highs. One of the fiercest beginnings to winter on record has slammed Europe with relentless assaults of heavy snowfalls.

Meanwhile, two key OPEC ministers welcomed higher oil prices, calling them fair, showing little inclination to pump more crude to lower prices that have rallied to more than a two-year high over US$91 a barrel. Arab OPEC ministers are meeting in Cairo this weekend, just weeks after a full OPEC conference chose to make no change to an output policy it has stuck to since December 2008.

Since then oil has extended a rally that's boosted prices by more than 30% from this year's low struck in May. The Organization of Arab Exporting Countries (OAPEC) brings together the Arab members of OPEC including top exporter Saudi Arabia, which has traditionally been viewed as a price moderate, as well as non-OPEC countries Tunisia, Egypt, Syria and Bahrain.