Crude prices soar in Asian trade

December 23, 2010 | 15:04

(0) user say

Crude prices resumed their rally in Asian trade on Thursday after hitting fresh two-year highs the day before as the US hiked its economic growth figures and oil stockpiles fell, analysts said.

New York's main contract, light sweet crude for February delivery, gained 20 cents to $90.68 a barrel in the afternoon.

Brent North Sea crude for delivery in February was up 14 cents to $93.79 .

Both contracts on Wednesday hit levels not seen since October 2008 at the onset of the global financial crisis.

Crude prices rose "following the stronger than expected US GDP (gross domestic product) figures and a sharper-than-forecast 5.3 million barrel slide in US crude oil inventories," the Commonwealth Bank of Australia (CBA) said in a report.

US officials on Wednesday revised up the rate of US economic growth in the third quarter to 2.6 per cent from a previous estimate of 2.5 per cent, pointing to an improving US recovery.

The news cheered crude markets as the US is the world's biggest oil consumer and a pickup in its economy would spark greater demand.

Oil traders were also heartened by a sharper than expected drawback in US oil inventories.

"The firming in demand conditions and tightening of US stockpiles is indicative of some improvement in demand," the CBA report stated.

The Department of Energy announced late Wednesday that US crude stocks dived 5.3 million barrels in the week to December 17.

That was more than double market expectations for a drop of 2.3 million barrels and indicated strengthening energy demand in the world's biggest economy.

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional