Oil price rise after sharp falls

22nd July 2010, Comments 0 comments

World oil prices firmed Thursday, following recent sharp falls, as traders assessed Federal Reserve chairman Ben Bernanke's gloomy outlook, alongside news of a surprise jump in US crude reserves.

New York's main contract, light sweet crude for delivery in September, gained 27 cents to 76.83 dollars a barrel.

Brent North Sea crude for September added 15 cents to 75.52 dollars in morning deals.

Oil fell Wednesday after Bernanke warned that the outlook for the world's largest economy remained "unusually uncertain" but said the US central bank could step in to bolster the recovery.

In Senate testimony, Bernanke said the economy would see only "moderate growth, a gradual decline in the unemployment rate, and subdued inflation over the next several years."

Oil also sank on Wednesday amid an unexpected surge in crude reserves in the United States, indicating weaker demand in the key energy-consuming nation.

The market was shocked by the latest data Wednesday from the US Department of Energy (DoE) showing that American crude oil reserves rising 400,000 barrels in the week ending July 16.

The market had expected a large drop of 1.3 million barrels, according to analysts polled by Dow Jones Newswires.

"Oil prices were lower (on Wednesday) after disappointing inventory data," said Westhouse Securities analyst David Hart.

"In addition, comments from Federal Reserve chief Ben Bernanke, which referenced unusual uncertainty with regard to the economic outlook, did not offer support."

The DoE added that gasoline (petrol) inventories grew by 1.1 million barrels last week, well above the 700,000-barrel increase forecast by analysts.

Stocks of distillates, which include diesel and heating fuel, added 3.9 million barrels, which was more than double the expected gain of 1.6 million barrels.

© 2010 AFP

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