By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Benchmark U.S. crude-oil futures edged higher in electronic trading Monday, as developments in Europe strengthened appetite for risk assets, and as the dollar weakened.
Crude for December delivery CL1Z +0.06% added 6 cents, or 0.1%, to $99.05 a barrel on the New York Mercantile Exchange during Asian trading hours.
Oil had closed out Friday’s North American session with a 5% gain for the week, settling at $98.89 a barrel. Read more about Friday's oil moves.
Europe remained in focus at the start of the trading week, after Mario Monti, a former member of the European Commission, was named to lead a new Italian government in the wake of the resignation of prime minister Silvio Berlusconi.
Hopes that the new government would be more capable of pushing through structural reforms need to tackle the nation’s debt problems — and prevent them spreading — helped boost equity markets across Asia on Monday.
Credit Agricole global oil analyst Christophe Barret said prices are likely to remain supported over the coming months.
“Disappointing non-Organization of the Petroleum Exporting Countries (OPEC) supply, delays to Libyan exports and political disruptions have tightened prompt market supplies,” Barret said.
“With refinery activity resuming to meet winter fuel demand and record-low crude inventories in northwest Europe, prices are likely to remain supported until the end of the first-quarter of 2012, posting a sharp decline thereafter,” he said.
“The economy, as always, remains the wild card,” Barret said.
The dollar index DXY -0.04% , which compares the U.S. unit to a basket of six other currencies, slipped to 76.898, from 76.949 in North American trading late Friday.
A weaker greenback tends to encourage buying in oil, as it makes the commodity cheaper to holders of other currencies.
Virginia Harrison is a MarketWatch reporter based in Sydney.
