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Crude Above $83 As Dollar Pulls Back

The price of crude oil hovered above the $83-mark on Monday, after China said Sunday that its oil imports rose 14% last year to a record high in December and on a weakening U.S. dollar. Also, an attack on Chevron's crude pipeline in Nigeria threatened to interrupt supplies, lifting oil prices.

NYMEX Light Sweet Crude Oil (WTI) futures for February 2010 were at $83.82, up $1.07 a barrel.

China said its exports jumped nearly 18% in December after declining for 13 months, an indication that global economic recovery is underway. On the other hand, China's trade surplus shrank by over 34% in 2009, reflecting its strong demand for imported raw-materials and consumer goods. Further, a data released by an industrial group last Friday reveled that China's auto sales in 2009 topped the U.S.

Oil prices had rallied 20% in the last month as cold weather griped the U.S., Europe and Asia. However, the prices were down in the last sessions after China announced plans to slow bank lending, raising concerns demand in the second largest oil consuming country will slow down. This apart, rising supplies of this energy product in the U.S. had also weighed on sentiment.

In economic news, the U.S Labor Department said Friday that employers cut 85,000 jobs in December, while economists had expected job losses to taper off to near zero. Despite this the unemployment rate was unchanged at 10% in December, an indication that large number of people are leaving the labor force.

Trading is likely to be range bound with no major economic news on tap today. However, activity could pick up after the closing bell on Wall Street, when Alcoa kicks off earnings season with its quarterly results.

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