Crude rises again

16/02/2009

Crude prices have risen again in early trading this morning (February 17th), extending substantial gains made at the end of last week.

By 5:41 Eastern Time, light, sweet crude oil for March delivery was trading at $37.64 (£26.39) on the New York Mercantile Exchange, extending the ten per cent gain made on Friday.

Bloomberg reports that the rises could in part be attributed to growing speculation that the Organisation of the Petroleum Exporting Countries will cut supply further at a meeting to be held in Vienna next month.

However, Harry Tchilinguirian, a senior oil-market analyst at BNP Paribas, added that the rally may also be a result of the view that the weak start to last week had pushed the March contract below its true value.

"The recovery in the prompt March month likely represents a catch-up as we head to the contract’s expiry this week," he postulated.

Prices fell sharply at the start of last week as demand data from the US showed a continued weak appetite for crude and other derivatives such as heating oil and DERV.