Oil ends 2009 just below US$80

Oil prices on Thursday hit US$80 a barrel for the first time in seven weeks as the dollar sank on the final day of the year.

Benchmark crude for February delivery added 53 cents at $79.89 a barrel on the New York Mercantile Exchange at midday. Oil jumped as high as US$80 a barrel earlier in the day. It hasn't traded for that much since November 11.

Trading volume has been especially light this week, however, as many investors already closed the books on 2009.

Crude rose as the dollar dropped earlier in the morning.

Oil barrels are priced in dollars, and when the dollar drops, oil tends to rise as it becomes easier for investors with foreign currency to buy. The United States(US) Dollar Index, which measures the greenback versus other major currencies, has since rebounded.

The US government also said Thursday that new claims for unemployment benefits dropped unexpectedly last week - an encouraging sign that the economy may soon begin creating jobs and more motorists will be on the road.

Meanwhile, the Energy Information Administration said that natural gas stockpiles dropped for the fourth straight week.

The nation's supply is still well above the five-year average, however, and last week's draw of 124 billion cubic feet was less than what analysts expected.

In other Nymex trading in January contracts, heating oil rose 1.52 cents to US$2.1245 a gallon and gasolene advanced less than a penny to US$2.05 a gallon. The February contract for natural gas gained 15 cents to US$5.559 per 1,000 cubic feet.

In London, Brent crude for February delivery rose 41 cents to US$78.44 a barrel on the ICE Futures exchange.

- AP