Investor interest keeps oil price up

SINGAPORE - Oil steadied above US$64 ($92.40) yesterday, holding near a three-month high after kicking off the new year with a fresh infusion of investor funds and renewed fears over political instability in the Middle East.

US February light crude was up 8USc at US$64.29 a barrel. On Friday, prices hit a session peak of US$64.45 a barrel, their highest since October 12. London Brent crude was down 2USc at US$62.70 a barrel.

Oil prices have zoomed more than US$6 higher since the last week of 2005, led primarily by a buying spree in the commodities market where two years of stellar returns as well as a weakening US dollar have whetted investors' appetites.

Gerard Burg of National Australia Bank said the unfolding situation with Israeli Prime Minister Ariel Sharon's health and worries over what impact Iran's nuclear ambitions would have on relations with the US "are weighing on where oil prices are at the moment".

- REUTERS