Oil prices rise, lifted by stock market rally

8th July 2010, Comments 0 comments

Oil prices rose on Thursday, winning support from rising stock markets ahead of the publication of key US energy inventory data, analysts said.

New York's main contract, light sweet crude for delivery in August, rose 66 cents to 74.73 dollars a barrel.

Brent North Sea crude for August delivery advanced 69 cents to stand at 74.20 dollars a barrel in midday London trade.

"What's really happening is that oil has been handcuffed to equities," said Victor Shum, an analyst for energy consultancy Purvin and Gertz.

Asian and European stock rallied on Thursday after a surge by Wall Street overnight when financial firm State Street Corp forecasted second-quarter profits well above analysts' projections.

"This rally in the US stock market followed by Asian stock markets has helped pull oil to around the mid-point of the 70 to 80-dollar range that oil producers and consuming countries are comfortable with," Singapore-based Shum told AFP.

"Given the state of the global economy and the expectations of a tighter oil market as the economy recovers, pricing at around 75 dollars is reasonable at this point."

Later Thursday, the US government publishes its latest weekly snapshot of energy inventories in the world's biggest oil consuming nation.

"Today, the main focus for the energy market will turn to the weekly EIA oil inventories report, as investors might expect a confirmation of a large drawdown in the crude oil inventories," said Myrto Sokou, energy analyst at Sucden Financial.

© 2010 AFP

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