Crude oil traded neared a two-week high today on optimism fuel demand will increase amid improved prospects for an economic recovery in the world's biggest energy consumer after US stocks advanced.
Oil rose 2.9 per cent yesterday as US equities gained for the sixth straight day after aluminum producer Alcoa's earnings topped analysts' estimates. Prices also rose as the International Energy Agency forecast oil demand will grow in 2011.
"Sentiment has turned positive and commodities and equities are benefiting from that," said Toby Hassall, a commodity analyst at CWA Global Markets Pty in Sydney. "It's the start of the quarterly earnings season, which has kicked off on a positive note with Alcoa."
Cude oil for August delivery traded at $77.18 a barrel, up 3 cents, in electronic trading on the New York Mercantile Exchange. Yesterday, the contract jumped $2.20 to $77.15, the highest level since June 28th.
Global oil demand will increase 1.6 per cent in 2011 to average 87.8 million barrels a day, the Paris-based IEA said in its first forecast for next year. It left its estimate for 2010 unchanged with a demand growth rate of 2.1 per cent to an average 87.8 million barrels a day in a report released yesterday.
US petrol demand rose 2.1 per cent for June 30th to July 6th, the Tuesday after the July 4th holiday, from a year earlier, according to MasterCard Incorporation's SpendingPulse report yesterday.
US crude stockpiles increased 1.74 million barrels to 353.5 million last week, according to a report from the American Petroleum Institute.
Bloomberg