Oil prices trading higher amid continued Iceland volcano chaos

20 April 2010 20 April 2010

BonTrade

Oil prices are trading higher on Tuesday in Asia amid continued activity within Eyjafjallajökull, Iceland’s volcano, which continues to cause problems and in some cases, chaos for many countries in Europe.

US Light crude oil futures for delivery in May traded at $82.14 a barrel at 0527 GMT, up 69 cents on the NYMEX, while in London, Brent crude oil futures for June delivery rose 54 cents to $84.77 a barrel on the ICE Futures Exchange.

“The volcano eruption in Iceland has strengthened and a new ash cloud is spreading south and east towards the UK,” a NATS statement noted. “This demonstrates the dynamic and rapidly changing conditions in which we are working.”

“The concerns the Iceland volcano have eased little, so prices rebounded. It shows the uptrend hasn’t collapsed,” said Yusuke Seta at Newedge, Japan. Seta expects crude to resume its uptrend toward $90 a barrel as the effects of European flight disruptions begin to fade.

Investors are eyeing the huge cloud of ash from the Icelandic volcano that has shut down air traffic in most of Europe for five days. Some cities, such as Barcelona and Rome, were beginning to receive flights Tuesday, but most European airports remained shut.