Crude climbs on spending figures

24 December 2007

Crude oil prices climbed on Friday after the US government published data suggesting the expected economic slowdown may not be as serious as previously predicted.

The figures showed consumer spending grew by 1.1 per cent during November - the biggest monthly increase for more than two years.

Fears that the US economy could be heading for recession in the wake of the sub-prime mortgage crisis have helped to force the price of crude oil down from last month's all-time high, but many analysts took the consumer spending figures as a more positive sign.

As a result US crude climbed by $2.25 to close at $93.31 (£47.08), while Brent crude rose by $1.58 to settle at $92.46.

James Cordier of Liberty Trading Group told Bloomberg: "Energy prices got a shot in the arm when consumer spending showed a much brisker pace that what people were looking for. That would add strength to the idea that demand could still be strong.''

However, some market experts were not convinced the rise was significant and Edward Meir of MF Global told Associated Press that it is impossible to say whether the upward movement will become a trend until investors return to work after the Christmas holiday.