Oil rose from the lowest level in a week after the US economy grew more than previously estimated in the third quarter, improving the outlook for fuel demand.
Crude gained, reversing an earlier decline, as the dollar weakened against the euro, making commodities priced in the US currency cheaper for investors. North Korea fired artillery shells yesterday at the South Korean island of Yeonpyeong, killing two soldiers and setting houses ablaze in the worst attack on its neighbor in at least eight months.
“There were relatively good numbers out of the US in terms of GDP and a little bit of dollar weakness, and that's certainly helping crude go higher,” said Jonathan Barratt, managing director of Commodity Broking Services in Sydney. “The market may be focusing on what's happening in Korea. It may cause supply issues.”
Futures gained as much as 52 cents, or 0.6 per cent, to $US81.77 a barrel on the New York Mercantile Exchange. The January contract was recently at $US81.65. Yesterday, it fell 49 cents, or 0.6 per cent, to $US81.25, the lowest settlement since Nov. 17. Prices are up 2.9 per cent this year.
The revised 2.5 per cent increase in US gross domestic product compares with a 2 per cent estimate issued last month and a 1.7 per cent rise in the second quarter, figures from the Commerce Department showed yesterday in Washington. Consumer purchases rose at the fastest pace since the last three months of 2006.