Oil rises towards $71 on confidence of recovery
Aug 14, 2009 Make Money Online
LONDON (Reuters) – Oil headed toward $71 a barrel on Friday, rising for the fourth day, on increasing confidence the global economy is emerging from its downturn and energy demand is starting to grow.
U.S. crude oil futures were trading at $70.85 a barrel, up 33 cents, by 1139 GMT.
London Brent crude rose 65 cents to $74.13.
“There is mounting evidence that the recession is over and that a phase of rapid growth in OECD industrial metals and energy demand is imminent,” Barclays Capital analysts said in a commodities research report.
Data on Thursday showed Germany and France, Europe’s two largest economies, posted second quarter growth, ending their recessions in April-June, earlier than expected.
Japan’s Nikkei average .N225 hit a 10-month closing high on Friday, while European shares rose in morning trade. .EU
The next gauge for the global economy will be July U.S. CPI data due out 1230 GMT. Analysts in a Reuters survey expected the CPI to be unchanged from June at a 0.7 percent increase.
Oil prices have more than doubled from below $33 in December. Most of the support for the commodity so far has come from hopes for a recovery from the economic downturn, rather than fundamentals of demand and supply.
The market’s focus is on the weather in the Atlantic Ocean, which could soon see its first named storm of the hurricane season.
Tropical storms and hurricanes can disrupt operations at offshore platforms and coastal refineries but many forecasts are for a mild hurricane season this year.
Although some analysts have forecast a potential pick up in oil demand, others, including OPEC officials and the International Energy Agency (IEA), are being more cautious.
A crude output ceiling increase is not on OPEC’s agenda because of high storage of oil by consumer countries, Iran’s OPEC governor Mohammad Ali Khatibi told the semi-official Mehr news agency on Friday.The producer group meets next month to discuss its output policy.
The IEA, energy adviser to 28 industrialized countries, said earlier this week signs of demand recovery were patchy.
(Additional reporting by Maryelle Demongeot in Singapore; editing by Anthony Barker)
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Tags: Crude Oil, IEA, Nikkei, OECD, Oil Price, Stock, Stock Market
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