Oil rises above US$53

LONDON – Oil climbed above US$53 a barrel yesterday, extending the previous session’s four per cent gains, after data out of big fuel consumers China and India stoked expectation economic recovery was gaining traction.

US crude futures for June delivery rose 21 cents to US$53,43 a barrel. London Brent crude rose 38 cents to US$53,23.Strong gains on Friday had been spurred by improved US consumer confidence, as well as a Reuters survey that showed Opec oil supply had fallen for an eighth consecutive month.The market held firm yesterday after surveys showed the manufacturing sectors in China, the world’s second biggest fuel consumer after the United States, and India had grown for the first time in months in April.Renewed economic optimism helped to drive Asian stocks to seven-month highs yesterday.The FTSEurofirst 300 index of top leading shares in April posted its biggest ever monthly rise and was again higher yesterday, although a public holiday in Britain limited trade.’We started to look at the green shoots in the United States and now we’re starting to look at what I like to call the bamboo shoots,’ said Olivier Jakob of Petromatrix.’As long as these keep investors hoping economic growth is not that far away, the price should be relatively well supported.’Oil prices have hovered around US$50 a barrel for much of this year, nearly $100 below an all-time high hit last July.But the market has recovered from a trough of US$32,40 touched in December, the lowest level since early 2004. Output cuts from the Organisation of the Petroleum Exporting Countries have helped to push the market higher.An Opec survey on Friday showed Opec had delivered around 84 per cent of promised curbs of 4,2 million barrels per day since September, around its highest ever level of output discipline.Opec efforts to support the price have been in part offset by the impact of high inventories on land and large amounts of floating storage as traders have made use of a bearish market structure to stockpile oil.The market could also be undermined this week depending on the results of US government bank stress tests, which will be released to the banks today and to the public on Thursday.’A negative report could potentially cause a substantial pullback in the equities and energy markets,’ said Ben Westmore, a commodities analyst at National Australia Bank.-Nampa-Reuters