Oil trades near $78 after demand report

21 July 2010

Written by Kim Bardsley

Crude oil prices were rising during electronic trading on the New York Mercantile Exchange as Asian markets reacted to yesterday's petroleum demand report from the American Petroleum Institute (API).

The latest figures from the industry-funded organisation suggested a substantial decline in crude stocks last week as demand conditions improved.

Polls conducted by both Bloomberg and Reuters revealed widespread expectation that an upcoming demand report from the Energy Information Administration (EIA) will register a decline of one million barrels.

The EIA figures are generally viewed as more consistent and comprehensive than the API figures.

Speaking to Reuters, Serene Lim, a Singapore-based oil analyst at ANZ, was quick to point out that "US products demand is still pretty weak", with distillates including heating oil seeing low demand in recent weeks.

Both crude and heating oil were higher in electronic trading this morning, with the headline crude contract rising as high as $77.97 a barrel by the time European markets opened.