Oil hits new 2009 highs above $71

11 June 2009

Oil prices extended recent gains on Wednesday to reach new seven-month highs of over $71 (£43.32) a barrel.

US crude for July delivery settled up $1.32 at $71.33 a barrel, having touched $71.79 in early trading. London Brent crude rose $1.58 to close at $70.80 a barrel.

The gains followed a report by the US Energy Information Administration which revealed a larger-than-expected draw in crude stockpiles over the past week, with inventories down by 4.4 million barrels.

This came after the group had earlier this week opted to raise its forecast for world oil demand in 2009 by 10,000 barrels a day - the first time since last September that it has upped its predictions.

Home heating oil customers have now seen crude prices hit new 2009 highs for the second time in two days as the market continues to bounce back from lows of less than $33 a barrel in December.

According to BP chief executive Tony Hayward, oil prices of around $60 to $90 are probably at "the right sort of level" as they are high enough to encourage investment in supply without affecting demand.

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