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Oil surges on raised demand forecast
 Oil prices on Thursday surged to an eight-month high above $73 a barrel after the western countries energy watchdog raised its forecast for global oil demand for the first time in almost a year.The International Energy Agencys abrupt change, saying that the oil market was witnessing the long-awaited emergence of improving fundamentals, suggests that economic green shoots are starting to boost energy consumption. The IEA forecast global oil consumption would be 120,000 barrels a day higher than it had previously estimated although it would still drop this year by 2.5m b/d. Global demand is put at 83.3m b/d this year, down 2.9 per cent from 2008. The IEA cautioned that the revision may only signal the bottoming out of the recession, rather than beginnings of a global economic recovery. Barclays Capital analysts said: It can hardly be argued that things are getting worse.
The market rallied on the bullish message, with West Texas Intermediate, the US benchmark, rising to an intraday high of $73.23 a barrel, more than double Februarys four-year low of $32.70 a barrel. Oil prices have risen 60 per cent this year, although they remain far below last years all-time high of almost $150. Long-dated contracts, such as futures for delivery in December 2017, climbed above $90 a barrel, signalling investors bets that oil prices have further to run. Posted by: Steve White 2009-06-12 |
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