Crude oil rises to six month highs, hover around US$57

08-May-09

As the market surged on hopes of an increase in energy demand amid signs of economic recovery, crude oil futures hovered around US$57 after a round of short covering from Japanese traders who returned to the markets after the Golden Week break. Results of the government's stress tests on banks in USA have been positive. Sentiments are being buoyed up by surging regional equity markets, amid renewed confidence in the outlook for the global economy. Oil prices also found support from new data that indicated 601,000 people making initial claims for jobless benefits in USA in the week ending May 2, far lower than analyst expectations of 635,000 and the lowest reading since January. New York's main futures contract, light sweet crude for June delivery rose to US$57.09 while Brent North Sea crude for delivery in June rose to US$57.1. The recent rise in prices has not been triggered by crude oil fundamentals, but by othe large economic scenario that is picking up signals from the stock market.