Oil tops 76 dollars on outlook hopes

9th July 2010, Comments 0 comments

World oil prices rose on Friday above 76 dollars on hopes of sustained solid energy demand after the International Monetary Fund bumped up its global growth projections, analysts said.

Already stronger demand in the United States, shown by a drop in crude inventories there, also helped push prices higher.

New York's main contract, light sweet crude for delivery in August, rose 60 cents to 76.04 dollars a barrel.

Brent North Sea crude for August gained 68 cents to 75.39 dollars.

The IMF on Thursday upgraded its global growth forecast for this year despite renewed financial turbulence stemming from Europe's debt crisis to 4.6 percent from its 4.2 percent estimate in April.

The IMF said the upgrade reflected "stronger activity" during the first half of 2010, adding that it maintained its 2011 forecast at 4.3 percent.

Stronger worldwide growth drives demand for energy.

"A slightly better IMF world growth outlook helped support both equities and commodity markets," said Andrey Kryuchenkov, an analyst for Russian financial group VTB Capital.

The oil market was also boosted by a report showing US crude reserves plunged almost five million barrels in the week ending July 2, much more than forecast, along with a larger-than-expected drop in the number of Americans registering for jobless benefits.

"The economic outlook is not as bad as many now seem to assume," said Capital Economics analyst John Higgins, referring to the US economy.

The pace of the rebound in the world's biggest economy "has shifted into a lower gear" but growth is likely to top 3.5 percent at an annualised rate in the second half of 2010 and be around 2.5 percent in 2011, he said in a market commentary.

"This would be a far cry from a renewed slide into recession."

© 2010 AFP

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