Thursday May 7, 12:11 PM
Oil price vaults above $58
LONDON (AFP) - Oil prices soared close to six-month highs above 58 dollars a barrel on Thursday, extending sharp gains won a day earlier on hopes of a pick-up in energy demand amid fresh signs of economic recovery.
New York's main futures contract, light sweet crude for delivery in June, rallied to 58.05 dollars a barrel -- the highest level since November 13.
Brent North Sea crude for June delivery advanced to 57.78 dollars -- also the highest point since mid-November.
"The positive sentiment on the exchanges was not driven by oil (supply and demand) fundamentals but rather by economic news following the release of a US labour report showing a slowdown in the number of US private-sector job losses for the month of April," analysts at JBC Energy Research said in a note.
Prices had already struck a five-month peak above 56 dollars on Wednesday as traders welcomed economic data from the United States, the world's biggest consumer of energy, that undershot analysts' forecasts.
Later Thursday, New York crude stood at 57.87 dollars per barrel, up 1.53 dollars from the close on Wednesday, while Brent oil was 1.37 dollars higher at 57.52.
The US private sector shed 491,000 jobs in April, fewer than expected by analysts, a survey by payrolls firm ADP (Paris: FR0010340141 - news) data showed Wednesday, signalling the prolonged recession may be easing.
The April figure was much lower than the 708,000 job cuts in March and the 645,000 expected by most analysts and the smallest private payrolls decline since October last year.
Wall Street saw solid gains Wednesday as a better-than-expected survey on US private-sector job losses helped ease jitters over upcoming results of "stress tests" on the banking system -- which are due later Thursday.
"Amid renewed confidence in the outlook for the global economy and in anticipation of the US bank stress test results expected later today, equity markets surged again yesterday, spilling over into the energy complex," said ODL Securities analyst Marius Paun.
Traders continued to digest news that crude stockpiles had risen by 600,000 barrels in the week to May 1, while analysts had forecast a much bigger jump of 2.1 million barrels.
Crude futures began hitting multi-month highs on Tuesday on hopes of a recovery in energy demand, alongside rising stock markets and a weak dollar.
The falling US currency makes dollar-priced oil cheaper for foreign buyers and tends to encourage demand, leading to higher prices.
At current price levels, oil remains far below last July's record peaks above 147 dollars a barrel, after slumping because of the economic downturn which is now showing signs of recovery.
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