LONDON – Oil rose towards US$58 a barrel yesterday morning, hitting a fresh 2009 high, as a surge in global stock markets raised expectations of economic improvement and a subsequent increase in demand for oil products.
• JOE BROCK
US light crude for June delivery rose US$1,55 cents a barrel to US$57,89 by 1024 GMT, off an earlier peak of US$58,05, oil’s highest level since November 17 2008.
London Brent crude rose US$1,38 cents to US$57,53.
‘I think oil is looking at the whole picture, stocks are doing well and economic signals are starting to look a bit better,’ said Rob Montefusco, a trader at Sucden Financial.
However, Montefusco said oil’s rally could be short-lived.
‘I think it has managed to break the US$55 technical level and it is now jumping further but I don’t see any fundamental reasons for it to go higher.’
Oil has tracked a recovery in the equity markets over the past month, with the US Standard & Poor’s 500 Index up some 36 per cent from March lows and rising nearly two per cent on Wednesday after better-than-expected jobs data.
The market was watching for the results of the US government stress tests on the ability of banks to weather a deep recession, that was to be released yesterday.
Expectations for rising oil demand as summer approaches were fuelled by leaks of the test results that suggested most banks were healthier than earlier thought.
In equity markets, Japan’s Nikkei average surged 4,55 per cent after a three-day holiday in the country.
The buying continued in Europe as shares rose ahead of Bank of England and ECB interest rate and policy decisions.
US crude inventories rose again, but by a lower-than-expected 600 000 barrels against forecasts for a 2,2 million barrels build, while US gasoline stocks fell last week by 200 000 barrels to 212,4 million, the Energy Information Administration said on Wednesday.
Saudi Arabia, the world’s top oil supplier, said it would not raise supplies for the time being as it attempts to shore up prices.
-Nampa-Reuters
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