Brent oil price surges over $85 on holiday market rally

Brent crude oil prices surged in late trading on Wednesday and this morning are holding onto gains above $85 a barrel as stock markets and commodity prices rally ahead of the Thanksgiving holiday in the US.

Latest Brent Oil Price

In London, Brent crude oil prices for January 2011 delivery was trading at $85.59 a barrel, 07.15 GMT this morning on the ICE Futures Exchange.

Markets received a boost yesterday, due to some positive US economic data showing improvements in US unemployment, consumer spending and wages, as well as traders short covering, ahead of the four day US Thanksgiving weekend.

“Last night’s rise apparently came mostly from short covering ahead of Thanksgiving today. The rise was a little too much. That’s why prices are down in Asia.” said Rikio Ishikura, trader with Newedge Japan.

Meanwhile, the ICE Dollar Index, which tracks the US dollar’s performance against a basket of six major world currencies, was down 0.10 percent at 79.791, just shy of a two month high of 80.000.

Staying Out of the Spotlight

“In times like this, prices either hardly move or are very volatile, therefore traders probably think it’s wise to stay out.” said Hiroyuki Kikukawa, analyst with Nihon Unicom.