Oil soars above $68 to seven-month high

NEW YORK: Crude oil prices soared above $68 a barrel for the first time in seven months, boosted by higher Chinese output, a weak US currency and rising equity markets, traders said.

New York's main futures contract, light sweet crude for July delivery, shot up to $68.68 on the back of a Wall Street stock surge before ending at $68.58, up by 2.27 dollars from Friday's close.

The price levels were last reached at the end of October. London Brent North Sea crude for delivery in July bounced as high as $68.03 a barrel before ending at $67.97 ,up $2.45 from Friday.

Prices climbed largely due to the weak dollar, said Antoine Halff of Newedge Group.



"The increase is not unique to the oil sector, it affects all raw materials. The investment funds in particular are investing in commodities as a protection against the dollar or to manage the fears of inflation," he said.

A weak US currency makes dollar-priced oil cheaper for holders of stronger currencies and, in turn, tends to stimulate demand and push prices higher.

The euro jumped above $1.42 for the first time this year, as rebounding global stock markets persuaded investors to switch away from the safe-haven US currency, dealers said.

BetOnMarkets analyst Dave Evans said the price increases also stemmed from news that the manufacturing sector in China expanded for a third month.