Crude oil soared today on the New York Mercantile Exchange to settle above $70, representing the first time it has reached the $70-mark in 2009.
Crude settled on the NYMEX at $70.01 Tuesday, a seven-month high and a jump of nearly $2 from yesterday's close. The price per barrel continued to increase after the close of the trading floor through electronic trading.
Also performing well, London Brent crude increased $1.74 to close at $69.62.
Helping to fuel the rally, the EIA reported today that world oil demand would increase by 10,000 barrels a day, underscoring the belief that the world economy is on the rebound.
Additionally, the value of the US dollar fell against other currencies, helping to boost acquisitions in dollar-traded commodities.
"I think it has to do with the dollar, that was the major driving force today," said Phil Flynn, vice president and senior market analyst for Chicago-based Alaron Trading.
With most analysts in agreement that inventories have fallen, Flynn added that the impending oil inventory report from the API may have helped to increase the price of crude as well, saying that the market may have "sensed it coming."
"Today it was about the dollar; tomorrow it will be about the inventories," Flynn commented. "The API just raised the stakes."
The energy analyst also sees the bullish environment persisting, with the price per barrel continuing to increase.
"I think for the near term, the target is $74," he added. "It just depends on what the Fed is going to do, whether or not they're going to raise interest rates."
In 2008, oil experienced an historic rise to nearly $140 a barrel in July, but dropped drastically over the next several months. The price per barrel has more than doubled since falling to record lows earlier this year.
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