LONDON, Aug 3 — Oil rose to a one-month high near US$71 a barrel today as positive Chinese economic data and firmer equities bolstered hopes of economic recovery and higher energy demand.
The market climbed about 2 per cent last week – the third straight week of gains – which helped to reverse steep losses in the middle of the month and brought July’s monthly decline to a marginal 0.6 per cent.
US crude added US$1.09 to US$70.54 (RM246.89) a barrel by 0834 GMT (3.54pm, Malaysian time) and hit an intra-day high of US$70.95, the highest since July 1 according to Reuters charts. Brent crude gained 83 cents to US$72.53.
“We’re getting close to the resistance area for crude oil and we need the continued support of equities,” said Olivier Jakob, analyst at Petromatrix. “As long as this continues, the dips are going to be bought.”
The latest gain brings oil within sight of the 2009 high of US$73.38 set in June, where Jakob and other analysts who use past price moves to predict direction see key reistance that prices could struggle to rally beyond.
On Friday, crude rallied almost 4 per cent as data showed the US economy shrank at a smaller-than-expected 1 per cent annualised pace in the second quarter, raising hopes the recession was easing.
“The US growth number has confirmed that the worst is behind us and the focus now is to find out how quick the recovery will be,” said Ben Westmore, a commodities analyst at the National Bank of Australia.
China’s crude stockpiles in June, including both state strategic and commercial reserves, declined 2.7 per cent from a month earlier, the first fall in four months, China OGP, a newsletter run by Xinhua, reported today.
Analysts said a weak dollar, which was near its lowest point this year on Monday against a basket of currencies amid increased risk appetite, would offer support to oil.
Supply curbs by the Organization of the Petroleum Exporting Countries in response to falling demand have helped crude rally from below US$33 in December.
Iran’s OPEC governor said prices were expected to reach US$80 by January, the oil ministry website reported yesterday. – Reuters
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