Thursday April 30, 01:33 PM
Oil prices climb in line with equities
LONDON (AFP) - Oil prices advanced on Thursday, taking their lead from rising stock markets, despite stubborn concerns that swine flu could dent global economic growth and energy demand, dealers said.
Brent North Sea crude for delivery in June won 35 cents to 51.13 dollars a barrel in London trade.
New York's main contract, light sweet crude for June, added 67 cents to 51.64 dollars a barrel.
World stock markets rallied Thursday as investors focused on hopes of a global economic recovery despite deepening fears about a possible swine flu pandemic.
"As long as (stock) markets ... continue their strength, it looks likely that crude oil will continue to pressure on the upside," said Brenda Sullivan, analyst at the Sucden Financial Research brokerage in London.
Crude futures had also climbed Wednesday on hopes of economic recovery and a large drop in US gasoline reserves that could signal revived demand.
The US Department of Energy (DoE) on Wednesday reported that crude oil stockpiles increased by 4.1 million barrels during the week ending April 24, amid weak energy demand as the economy struggles with recession.
US crude inventories increased for the seventh consecutive week, to 374.7 million barrels, 18 percent higher than a year ago and the highest level since September 1990.
Dave Ernsberger, senior editorial director at energy information provider Platts, said "the fundamental data from the oil market is fairly supportive now."
He was referring to the larger-than-expected decrease in US gasoline stockpiles.
But Ernsberger also warned that signs of an economic recovery risked "being completely derailed by the swine flu."
The World Health Organization (WHO) raised its flu alert on Wednesday signalling a swine flu pandemic was "imminent" as more nations confirmed cases of the disease that has spread around the world in a matter of days.
Dresdner Kleinwort analyst Eugen Weinberg said the swine flu outbreak could dent demand for air travel and oil. Jet fuel, or kerosene, is refined from crude.
"The outbreak of swine flu will lead to restrictions on international travel and will weigh on oil demand," Weinberg said.
"Furthermore, market participants are concerned that a pandemic may adversely affect the economy.
"Alternatively, the risk of a pandemic could potentially lead to lower oil output in Mexico. After recent cutbacks in oil production by Saudi Arabia, Mexico is now the second largest oil supplier to the United States after Canada."
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
