Oil climbs further at end of week

28 May 2010

Written by Kim Bardsley

Crude oil prices rose further during the electronic trading session of the New York Mercantile Exchange, with commodities lifted by China's statement of support for Europe.

The Chinese government issued a policy statement refuting speculation that it was reviewing its euro holdings and confirming that it is continuing to hold European assets.

Speaking to Bloomberg, David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney, said the announcement "provided some impetus" for investment in crude.

"The Energy Information Administration data released earlier this week showed that the overall level of US oil demand was pretty strong," he added.

The US Energy Department-funded group reported a sharp drawdown in diesel and gasoline inventories last week, suggesting a recovery in demand for transport fuels as the summer driving season gets underway.

Crude and heating oil prices jumped following the report and this morning, the headline crude oil contract was rising towards $75 a barrel.