Oil follows Wall Street upwards

27/11/2008

The price of oil rose more than seven per cent during trading yesterday (November 26th) following strong trade on Wall Street.

On the New York Mercantile Exchange, light, sweet crude for January delivery rose to $54.44 (£35.14) a barrel, up $3.67 from the previous day's close.

Such rises may in turn impact on the price of derivatives such as heating oil, DERV and marine fuel.

The gains have widely been attributed to a rally on Wall Street, in addition to the announcement that China would cut interest rates by 1.08 per cent.

Mark Waggoner, president of Excel Futures in California, told Reuters: "The stock market is trading higher, which is giving the few people who are in on this holiday week reason to push the [oil] market up."

However, Phil Flynn, senior trader at Alaron Trading in Chicago, told Bloomberg that the stock rally may be short lived.

This in turn could have a downward effect on oil and derivatives such heating oil, DERV, marine fuel and red diesel.