MarketWatch reported that oil prices were up following news of a strengthening economy.
Articles Tagged "light sweet crude"
Prices of light, sweet crude on the New York Mercantile Exchange are currently trading at half their peak hit in July last year. This has led some producers to postpone oil sands projects as they are capital-intensive and need crude futures above a certain threshold to be viable. US oil demand is also in the doldrums due to the global economic downturn, making it harder for producers to justify investments in new crude oil production. However, PetroChina has gone ahead with its investment in Canadian oil sands.
The oil market is bubbling over. Volatile at the best of times, the last year has been extraordinary even by those standards. When the price of crude came close to $150 a barrel, many thought the commodity was overpriced. And yet, some analysts are forecasting $200 a barrel before long. On Thursday, crude prices hovered above $61 a barrel in Asia after a more positive economic outlook from the U.S. central bank buoyed investor confidence. The Fed said industrial companies cut production far less in June than they had in previous months and that it now expects the economy to contract at a slower pace than previously thought.
Crude oil rose for a second day in New York on Tuesday, as gains in the stock market increased optimism that the global economy is recovering. "Sentiment has driven this market from its lows in the hopes of an imminent recovery," said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. "If we do see equities continue their rally, oil and a lot of other commodities are probably going to follow."
The jump was all too clear. A surprise drop in U.S. oil inventories caused crude prices to jump 14 per cent on Thursday, in New York, powering a broad commodities rally that pushed copper and corn higher. The only noticeable drop was in gold, which closed lower for the first time in three days.
The United States government statement that U.S. employers had slashed over a half million jobs in January, the highest yet in 35 years, lead to crude oil prices dropping just below $41 a barrel, way below the high of $147 a barrel last summer. There is a link between layoffs and the demand on oil, say analysts, as those laid off see no need for the daily commute, and buy less of petroleum products like toys and raincoats.