SINGAPORE: Crude prices resumed their rally in Asian trade on Thursday after hitting fresh two-year highs the day before as the US hiked its economic growth figures and oil stockpiles fell, analysts said.
New York’s main contract, light sweet crude for February delivery, gained 28 cents to 90.76 dollars a barrel.
The index had breached October 2008 highs on Wednesday when it hit 90.80 dollars in intraday trade before pulling back slightly to close at 90.48 dollars.
Brent North Sea crude for delivery in February was up 17 cents to 93.82 dollars. It had leapt to 93.94 dollars per barrel during Wednesday trade — its highest level since October 2008 — before closing at 93.65 dollars.
Crude prices rose “following the stronger than expected US GDP (gross domestic product) figures and a sharper-than forecast 5.3 million barrel slide in US crude oil inventories,” the Commonwealth Bank of Australia (CBA) said in a report.
US officials on Wednesday revised the rate of US economic growth in the third quarter up to 2.6 per cent from a previous estimate of 2.5 per cent, with the upbeat revision pointing to an improving US recovery.
The news cheered crude markets as the US is the world’s biggest oil consumer and a pickup in its economy would spark off greater demand for energy.
Oil traders were also heartened by a sharper than expected drawback in US oil inventories.
“The firming in demand conditions and tightening of US stockpiles is indicative of some improvement in demand,” the CBA report stated.
The Department of Energy announced late Wednesday that US crude stocks dived by 5.3 million barrels in the week to December 17.
That was more than double market expectations for a drop of 2.3 million barrels and indicated strengthening energy demand in the world’s biggest economy.
How does this increase affect Singaporeans when many are still thinking that the increased oil price only affects motorist? Awesome!