Crude gains on signs of economic recovery

22/12/2008

Crude oil prices have risen in New York this morning (December 22nd) as investors take confidence in new economic stimulus measures and factor in the planned production cuts which will come into effect next month.

On the New York Mercantile Exchange, crude for February rose as high as $43.18 (£29.10) a barrel, paring substantial losses witnessed last week.

Such rises may in turn have an effect on the price of heating oil, DERV, farm diesel and other distillates.

Jonathan Barratt, an energy analyst at Commodity Broking Services, told Bloomberg that prices will climb further as the Organisation of the Petroleum Exporting Countries limits supply.

He added the impetus to do so will continue to grow as members of the cartel are "desperate to get dollars and [...] desperate to get the prices higher".

Earlier this month, the group announced a record supply cut of 2.2 million barrels of oil per day, which will come into effect in January.