By Wang Lan (China Daily)
Updated: 2007-11-21 17:38

Shanghai fuel oil futures rose 2.54 percent, the biggest one-day price surge since mid October, tracking the rocketing international crude oil prices, which touched their historic high of $99.23 in electronic trading.

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The most actively traded fuel oil futures contract for March delivery on the Shanghai Futures Exchange, SHFE, climbed 96 yuan, or 2.54 percent, to close at 3,878 yuan per ton. The most actively traded crude oil futures contract for January delivery on the New York Mercantile Exchange, NYME, recorded $99.23 a barrel before it dipped slightly to $98.6, continuing its four day price surge beginning last Friday.

Analysts said the uncertainties overhanging US economic growth meant more investors seeking refuge in the global energy market.

"Concerns about a further weakening of US dollar help push up the global oil price, because investors are looking to energy to hedge against the weak currency," said Lin Hui, an analyst at the futures company Orient Securities.

At a summit held last weekend, the Organization of Petroleum Exporting Countries, OPEC, did not express intentions to increase production in the near future, which analysts claimed was a factor triggering the oil price jumps that began on Monday.

The supply and demand fundamentals were tightened by increased demand for heating oil in US, as the country expects a colder winter this year, analysts said.

Traders and analysts expect oil prices to increase further in the coming winter months when real demand starts to deplete existing inventories.

"After reaching the $100 psychological barrier, the world oil is expected to break through $120 in the following months," Lin added.

A December 5 OPEC meeting will decide whether to increase output at a time when the US dollar is falling. Leaders of some OPEC members have already complained about what they consider under-valuation of the commodity.