Oil prices ended higher on the first day of 2009 trading as investors focused on commodities amid tensions over Israel's onslaught on Gaza, and a Russia-Ukraine gas row.
New York's main contract, light sweet crude for February, rose $1.74 from its closing price on Wednesday to end at $46.34 yesterday on the New York Mercantile Exchange.
In London, Brent North Sea crude for delivery in February advanced $1.32 to settle at $46.91 a barrel on the InterContinental Exchange.
Traders said prices were extremely volatile in a reflection of thin market turnover as many investors remained in a New Year holiday mood ahead of the weekend.
"The volatility is amazing," said independent analyst Ellis Eckland, noting that investors were refocusing on commodities after experiencing their "worst quarter."
"Some people are putting money into the commodities. Some institutions look and say, 'Wow, commodities have had the worst quarter they've ever had,'" Eckland said.
The market experienced a tumultuous 2008, soaring to record highs above $147 a barrel in July before a sharp global economic downturn slashed demand for energy and pulled prices sharply lower, dropping below $35 in December.
"Prices have performed so poorly that people believe it won't get much worse," said Adam Siemisnki of Deutsche Bank.
"So I would say a combination of the stock market, some news on OPEC compliance, the gas issue, and the troubles in Israel," he said, summing up the market volatility yesterday.
