December 12, 2007	Wednesday	Zilhaj 1, 1428

LONDON, Dec 11: Oil prices climbed strongly on Tuesday ahead of an expected cut to US interest rates which could support demand for energy, dealers said.

They said weather problems in the United States and news of a major bomb attack in Algeria also provided some support for prices in a market which has recently lost considerable ground.

New York’s main contract, light sweet crude for January delivery, jumped $1.05 to $88.91 per barrel.

Brent North Sea crude for January delivery gained 80 cents to $88.84.

“I think we can expect quite a bit of volatility for oil prices this week,” said Victor Shum, of Purvin and Gertz international energy consultants in Singapore.

Concerns about United States economic growth have weighed heavily on oil prices in recent weeks.

After a run-up to record highs of close to $100 in late November, prices have fallen back on concerns a sharp slowdown in the United States, the world’s biggest consumer, could dampen demand.

“I think the bullish froth has been taken out of the crude oil futures market,” Shum said.

Highlighting the negative tone was the fact that Opec’s decision last week to leave its daily output quota unchanged at 27.25 million barrels failed to spark a rally, the analyst noted.

Prices initially spiked in reaction to Opec’s decision but then fell back quickly on profit-taking.Shum said that as the year drew to a close, many investors were booking profits “to boost their annual returns and hence their year-end bonuses.”

Meanwhile ahead of the Fed’s rate decision, oil prices were being supported by disruption to imports in the United States caused by fog.

“Crude futures were a little firmer in both London and New York ...underpinned by news of dense fog, which slowed down US crude imports through the Houston Ship Channel,” said Davies of Sucden.

Players were also following developments in oil-exporter Algeria, where a twin car bomb strike rocked Algiers on Tuesday killing at least 62 people and devastating a UN office.—AFP