Crude demand strengthens for another week

24 December 2009

Written by John King

Crude oil prices rose for the third consecutive session during electronic trading on the New York Mercantile Exchange this morning (December 24th), with the commodity supported by the latest official demand report.

According to the Energy Information Administration (EIA), US crude supplies fell by 4.84 million barrels last week, a larger drawdown than many investors had anticipated.

Following the publication of the EIA figures yesterday, crude prices jumped during the US trading session, closing for the day up 3.1 per cent at $76.67 (£47.95) a barrel, while heating oil prices also breached the $2-a-gallon mark.

Speaking to Bloomberg, Gordon Kwan, an analyst at Mirae Asset Securities in Hong Kong, pointed to other factors underpinning the price rally.

"So far the bullish catalysts outnumber the bearish catalysts - OPEC's [the Organisation of the Petroleum Exporting Countries] decision to hold output unchanged despite better-than-expected demand growth from China and the renewed weakening of the dollar," he said.

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