Oil prices rise on speculation

21 February 2008

The hint of increased demand for heating oil and crude has pushed prices up past the $100 mark again, it has been reported.

Bloomberg stated crude prices have risen by 16 per cent since this year's lowest on February 7th, to more than $101 (68.5 euros) a barrel on Thursday morning.

It suggested the rise was in response to possible increases in demand – the International Energy Agency says there will be a one million barrels a day increase this year.

Increased crude demand by China and India will threaten to create a "supply crunch" by 2015.

David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney, told the news agency prices were indicative of "fairly solid" demand.

"There is a question of even if the US went into a recession, how much of an impact on oil demand that would have,'' he added.

If US interest rates are cut, this could help the price of a barrel increase further as investors shift cash into hard assets.

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