CORRECTED: Oil rises over $75 on weaker dollar

 @ibtimes
on February 01 2010 5:08 PM

Oil prices rose to $75 a barrel on Monday as support from a weaker dollar, higher U.S. stocks, and an oil spill in Texas which limited crude oil deliveries to some U.S. refiners.

Still, oil prices were still near a one-month low of $74 a barrel after having fallen by almost $10 a barrel over the last two weeks since hitting a 15-month peak of $83.95 on January 11.

U.S. crude for March delivery settled at $75.26 a barrel, up 72 cents or nearly 1 percent. On Friday, the contract fell $1.54 to end at $74.54, the lowest settlement since December 22, after trading as low as $74.01.

London ICE Brent settled at $73.69, up 86 cents.

Crude is having a bounce after being down last week, with the stock market recovery, Bernanke and the weaker dollar all in the mix, said Tom Bentz analyst at BNP Paribas Commodity Futures Inc in New York.

An oil spill in Texas that blocked shipments to several Gulf Coast refineries and a Louisiana refinery fire on Friday may have also boosted crude prices, Bentz added.

The U.S. dollar index was weaker after data showing sales of previously owned U.S. homes fell at the fastest pace on record in December. A weak dollar tends to support commodities priced in dollars as they become cheaper for holders of other currencies.

Wall Street rose after a three-day slide at the end of last week, as doubts over U.S. Federal Reserve Chairman Ben Bernanke's second-term confirmation waned. <.N>

A fire at a Louisiana refinery on Friday and an oil spill in Texas' Sabine-Neche Waterway may have also supported the energy complex by raising oil product prices.

The Texas oil spill blocked seaborne supplies to four Texas refineries representing 6.5 percent of U.S. capacity over the weekend.

Texas officials said the clean-up of the 11,000 barrels of oil was underway. The spill is the biggest in Texas since 1994.

Separately, Mexico closed its Dos Bocas oil terminal on Sunday due to bad weather, the government said. Almost all of Mexico's crude oil exports are shipped to refineries on the Gulf Coast of the United States.

Despite Monday's higher oil prices, demand for oil remains relatively weak in the wake of the financial crisis.

Milder weather in the U.S. Northeast, the world's top heating oil market, will add to that weakness this week.

U.S. heating oil demand will be 18 percent below normal, a report from the U.S. National Weather Service said.

Oil prices have broken below the 100-day moving average of around $75.25, a key indicator of market sentiment which measures the average price of oil over the last three months.

U.S. crude oil is expected to rise to an average of $77.50 a barrel in 2010, a Reuters poll of 29 market analysts showed, up from $76.40 a barrel in December.

(Additional reporting by Robert Gibbons and Gene Ramos in New York; David Sheppard and Gwladys Fouche in London; Fayen Wong in Perth; Editing by Marguerita Choy)

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