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Tuesday 16th of June 2009
March 27, 2009

Oil rises as US economic outlook shows glimmer of hope


by Peter Charalambous
”Oil

For five sessions in a row, crude oil has closed at above $50 a barrel and has risen after better than predicted news for US durable goods and hopes of a rebound on the stock market.

Crude oil is being sold off in greater swathes as there is now a huge inventory of US oil, and a combination of supply and poor demand has meant it has been difficult to create a price floor.

Tom Bentz, an analyst at BNP Paribas Commodity Futures, has said that the $50 a barrel price needs to be tested, although the market is buoyant, there is a danger that it could easily slip back.

US refineries were operating at 82 percent of their operable capacity last week, which is down from the previous week. However crude oil imported over the past week has increased to 204,000 barrels per day.

According to the Energy Information Administration, US crude oil inventories increased by 3.3 million barrels to 356.6 million, which is more than double economists predictions and is the highest level since mid 1993.

It is hoped that increased stability on the macroeconomic front from the increase in durable good orders, and a kick-start in the housing market, will, in turn, fuel demand.

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