Oil prices touched 4 month highs: above US$53 a barrel - a surge of almost 17% in just over three weeks. The spurt in prices was triggered by active fund buying and supply concerns fuelling an intense 3 week rally that OPEC has yet to subdue. Prices are about 2 dollars lower than on Oct 25, when the market hit an all-time high of US$55.67 a barrel.
US refineries ran at 89.3% of capacity last week, their lowest rate in four months, aggravating fears that global product supplies could tighten significantly. Although US data showed petroleum inventories at their highest in at least five years, traders are still worried about supplies due to steadily rising demand. Supplies of heating oil inventories slid 900,000 barrels to 40.2 million barrels in the week to Feb 25, deepening the deficit from a year ago to 8%. Late winter frigid weather continues to strengthen demand in the US Northeast.