Oil climbs tops 74 dollars per barrel

27th May 2010, Comments 0 comments

World oil prices surged beyond 74 dollars on Thursday as the euro rebounded against the dollar and global stock markets bounced higher, traders said.

New York's main contract, light sweet crude for delivery in July, soared 2.61 dollars to 74.12 dollars a barrel.

London's Brent North Sea crude for July jumped 2.32 dollars to 74.06 dollars.

Global share prices and the euro rebounded higher on Thursday, extending the previous day's large gains, aided by easing concerns over the eurozone financial crisis and Korea, dealers said.

Markets were also boosted as China brushed aside reports it was reviewing holdings of eurozone debt.

"As outside markets continue to reflect less fear and more optimism, oil influences may conspire to move oil more solidly into the 70-75 dollar range," said analysts at the Sucden Financial Research brokerage in a note.

In afternoon London trade, the European single currency rose to 1.2270 dollars, up from 1.2181 dollars in late New York trade on Wednesday.

A weaker US unit makes dollar-priced crude cheaper for buyers using stronger currencies, which therefore tends to stimulate oil demand and push prices higher.

Meanwhile, Frankfurt equities soared 3.07 percent, London leapt 3.03 percent, Madrid surged 3.64 percent and Paris put on 3.20 percent.

The strong performance followed earlier gains in Asia, where Tokyo bounced 1.23 percent and Hong Kong rose 1.22 percent.

On Wall Street on Wednesday, the key Dow stock index rallied by more than 200 points in opening trade.

"The (oil) market is following the situation with the euro. I think the market is continuing to rebound probably based on technicals," said Tony Nunan, an energy risk manager with Mitsubishi Corp in Tokyo.

"People are feeling a little bit better since the stock markets are recovering," Nunan told AFP.

Oil rallied on Wednesday, with sentiment lifted by recovering stock markets and fresh data pointing to a sustained economic recovery in the key US energy market.

A report by the US Department of Energy on Wednesday also showed improving demand in the world's biggest energy consuming nation.

The report showed an unexpected dip in US gasoline (petrol) supplies, dropping 200,000 barrels. Distillate stocks, including diesel and heating oil, fell 300,000 barrels in the week ending May 21.

Ben Westmore, a minerals and energy economist with the National Australia Bank in Melbourne, said the fall in US energy stockpiles, which indicate improving demand, is "positive for the oil price."


© 2010 AFP

0 Comments To This Article