Oil rallies ahead of demand data

25/02/2009

Crude oil futures have risen in New York this morning (February 25th) ahead of the publication of new demand data from the US Energy Department.

During early trading on the New York Mercantile Exchange (Nymex), the commodity rose above $40 (£27.62) a barrel, extending gains of $1.52 a barrel made yesterday.

Heating oil also made substantial headway on the Nymex yesterday, with heating oil contracts for March delivery closing the day at $1.200 a gallon, up 3.2 cents.

Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna, told Bloomberg that investors will be eagerly awaiting data from the Energy Department.

"Yesterday's strength in oil was fostered by equity markets, but what really hinders crude for now is bad demand data," he said.

Last week's report spurred a rally after it recorded the first decline in US inventories this year, indicating that demand for crude and derivatives such as heating oil picked up.