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Oil prices rise above US$75 on upbeat economic news
Source: Agencies |
July 9, 2010, Friday
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OIL rose for a second day yesterday, following two upbeat economic reports and signs that petroleum supplies were shrinking.
Benchmark crude rose US$1.37 to settle at US$75.44 a barrel on the New York Mercantile Exchange.
The Labor Department said initial jobless claims fell last week to the lowest level since early May. The news came as hundreds of thousands of Americans lose unemployment benefits because Congress has yet to pass an extension of benefits.
In addition, the International Monetary Fund raised its 2010 world growth forecast to 4.6 percent from 4.2 percent, although it said Europe needs to act quickly to resolve its debt crisis and bolster consumer confidence or the economic recovery may stall.
The IMF boosted its growth estimate for the U.S. economy to 3.3 percent from 2.7 percent and said the country should take more steps to curb its budget deficit. It also raised its growth forecast for China to 10.5 percent from 10 percent.
The U.S. and China are top consumers of oil and other commodities.
Higher stock prices helped support oil prices as well. The Dow Jones Industrial Average was ahead by 60 points in late afternoon trading.
Thursday's rising oil prices came as the government said crude inventories fell last week. Gasoline supplies grew, indicating sluggish demand for gas in the peak summer driving season.
The Energy Department's Energy Information Administration said crude inventories shrank by 5 million barrels to 358.2 million barrels, which was 3.1 percent higher than year-ago levels and above the upper limit of the average range for this time of year.
Gasoline inventories rose by 1.3 million barrels to 219.4 million barrels. That is 3 percent above year-ago levels.
Demand for gasoline over the four weeks ended July 2 was 2 percent higher than a year earlier, averaging nearly 9.3 million barrels a day.
"While demand has improved, it's really basically flat to last year, and last year we were still in the depth of recession," Tradition Energy analyst Addison Armstrong said.
"I think there's a lot of uncertainty out there due to the high level of unemployment," he said.
Armstrong expects oil and retail gasoline prices to fall in the weeks ahead since there are ample crude oil and gasoline supplies.
In other Nymex trading, heating oil rose 2.66 cents to settle at US$2.0053 a gallon, gasoline gained 2.58 cents to settle at US$2.0511 a gallon and natural gas lost 16.6 cents to settle at US$4.399 per 1,000 cubic feet.
Brent crude added US$1.20 to settle at US$74.71 a barrel on the ICE futures exchange.
Benchmark crude rose US$1.37 to settle at US$75.44 a barrel on the New York Mercantile Exchange.
The Labor Department said initial jobless claims fell last week to the lowest level since early May. The news came as hundreds of thousands of Americans lose unemployment benefits because Congress has yet to pass an extension of benefits.
In addition, the International Monetary Fund raised its 2010 world growth forecast to 4.6 percent from 4.2 percent, although it said Europe needs to act quickly to resolve its debt crisis and bolster consumer confidence or the economic recovery may stall.
The IMF boosted its growth estimate for the U.S. economy to 3.3 percent from 2.7 percent and said the country should take more steps to curb its budget deficit. It also raised its growth forecast for China to 10.5 percent from 10 percent.
The U.S. and China are top consumers of oil and other commodities.
Higher stock prices helped support oil prices as well. The Dow Jones Industrial Average was ahead by 60 points in late afternoon trading.
Thursday's rising oil prices came as the government said crude inventories fell last week. Gasoline supplies grew, indicating sluggish demand for gas in the peak summer driving season.
The Energy Department's Energy Information Administration said crude inventories shrank by 5 million barrels to 358.2 million barrels, which was 3.1 percent higher than year-ago levels and above the upper limit of the average range for this time of year.
Gasoline inventories rose by 1.3 million barrels to 219.4 million barrels. That is 3 percent above year-ago levels.
Demand for gasoline over the four weeks ended July 2 was 2 percent higher than a year earlier, averaging nearly 9.3 million barrels a day.
"While demand has improved, it's really basically flat to last year, and last year we were still in the depth of recession," Tradition Energy analyst Addison Armstrong said.
"I think there's a lot of uncertainty out there due to the high level of unemployment," he said.
Armstrong expects oil and retail gasoline prices to fall in the weeks ahead since there are ample crude oil and gasoline supplies.
In other Nymex trading, heating oil rose 2.66 cents to settle at US$2.0053 a gallon, gasoline gained 2.58 cents to settle at US$2.0511 a gallon and natural gas lost 16.6 cents to settle at US$4.399 per 1,000 cubic feet.
Brent crude added US$1.20 to settle at US$74.71 a barrel on the ICE futures exchange.
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