Oil gains again on economic hopes

26/02/2009

Oil has continued its impressive rally during this morning (February 25th), as investors grow optimistic that the US economy may recover more quickly than most had anticipated.

During trading on the New York Mercantile Exchange, crude contracts for March delivery extended the gains made yesterday, when the commodity finished the day at $42.31 (£29.68) a barrel, up more than $2.50.

Heating oil prices have also enjoyed a boost, with March heating oil contracts finishing nearly three cents higher on the gallon by the close of trading yesterday.

The rally was spurred in large part by a lesser-than-anticipated rise in US crude inventories, with the Energy Department announcing a rise of 750,000 barrels during the week ended February 20th.

"I'd like to see a couple more weeks of inventory data to see if this really is a trend," said Peter McGuire, managing director at investment firm Commodity Warrants Australia, speaking to the Associated Press.

An increase in demand for crude may result in concomitant rises in heating oil prices.