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Oil prices hover at $61 a barrel Oil prices rise to six-month high
(about 8 hours later)
Oil prices are hovering around $61 a barrel, as supply concerns were prompted after two key US refineries were hit by fires. Oil prices have hit six-month highs, breaking through $62 a barrel after data showed a fall in US oil supplies for a second straight week.
US light crude increased $1.24 to $61.34 a barrel, while Brent oil climbed $1.04 to $59.96. US light crude rose to $62.04 a barrel, while London Brent climbed to $60.59.
Another factor pushing up prices was unrest in oil-producing nation Nigeria. US crude slipped below $60 on Tuesday, dragged lower by official data showing a record fall in the number of new homes built in the US.
The price of crude oil has risen from below $33 a barrel last December, but remains far below the record of around $147 a barrel seen last July. Analysts said the fall in US oil inventories could indicate an increase in demand for oil.
Figures released late on Tuesday showed stocks of crude oil in the US dropped more than forecast in the week to 15 May. Crude stockpiles dropped by 2.1 million barrels for the week ended May 15, according to US Energy Department's Energy Information Administration. Petrol inventories dropped by 4.3 million barrels - a bigger decline than forecast.
"Energy market participants ... appear to be making the same conclusions as their equity market cousins have that optimism is not misplaced," said Mike Fitzpatrick, vice president at MF Global in New York. "Week over week, the report is very bullish," said Phil Flynn of Alaron trading in Chicago.
Oil prices have risen from $50 a barrel over the last three weeks, as optimism about the state of the world economy has grown.Oil prices have risen from $50 a barrel over the last three weeks, as optimism about the state of the world economy has grown.
"It has been easy during the last two months to write that oil prices were just following the direction of the Dow," said Olivier Jakob of Petromatrix in Switzerland. And it has jumped from $32 levels seen in January, though remains well below the record high of $147 touched last July.
"But we think that time is changing to an environment where oil markets will trade more their own fundamentals," he said.