Crude oil climbs again on demand bets

1 March 2010

Published by Kim Bardsley

Crude oil prices climbed for a second day on the New York Mercantile Exchange this morning (March 1st) as investors grew confident that improved economic conditions would create a recovery in demand for fuel.

Speculation came ahead of the publication of the latest inventories reports from the American Petroleum Institute and the Energy Information Administration, which collectively track rises and falls in crude, gasoline, propane and heating oil stocks throughout the US.

Speaking to Bloomberg, Mark Pervan, senior commodity strategist at Australia and New Zealand Banking Group Ltd in Melbourne, explained: "The market is always very sensitive to what's happening in the US since it's the world’s biggest user. There is a general feeling that we will see global demand picking up this year."

Higher demand may in turn translate into higher fuel prices, although daily fluctuations in prices are unlikely to have a material impact on prices paid for petrol, heating oil and other fuels as these are priced using longer term calculations.

Currently, oil prices are back above the $80-a-barrel (£52) mark, while heating oil prices are around $2.05 a gallon.

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