Oil prices boosted by economic hopes

25 August 2009

Oil prices rose further on Monday as fresh hopes of a global economic recovery helped extend last week's rally and pushed values beyond $74 (£45.22) a barrel.

US crude for October delivery rose 48 cents to close at $74.37, while London Brent crude settled at $74.26 - up seven cents on the previous day.

The gains came on the back of new figures that showed a bigger-than-expected rise in industrial orders across the eurozone in June, fuelling hopes of a rebound in the economy.

Meanwhile, China reported a 3.5 per cent increase in oil demand during July, compared with the same month in 2008, helping to boost the market further.

Home heating oil customers had already seen crude prices jump by almost ten per cent last week - and some may wish to stock up on supplies now to avoid any further rise in future.

Edward Meir, oil analyst at MF Global, said the growing hopes of a global economic rebound could help lift values as high as $80 a barrel in the coming months.

According to US Federal Reserve chairman Ben Bernanke, the recovery is now within sight, although there remain a number of challenges to overcome before growth can be restored.

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