Demand for oil continues

21 February 2008

The price of heating oil and crude oil edged up again in New York on Thursday morning, it has been reported.

Bloomberg stated crude prices have increased by 16 per cent since this year's lowest on February 7th, to just over $101 (£50) a barrel.

It attributed the rise to possible increases in demand - the International Energy Agency has forecast a one million barrels a day increase this year.

China and India will increase their demand for heating oil and crude to an extent where a "supply crunch" would be created as soon as 2015.

David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney, told the news agency overall demand seemed to be "holding at fairly solid levels" because of where prices were.

"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.

Lowered interest rates in the US could help the price of a barrel increase even more as investors shift cash into hard assets.

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