Crude oil prices jumped again today on the New York Mercantile Exchange, with intra-day trading hitting a high of $73.23. Buoyed by recent reports that demand is rising, the price of oil has hit another high for the year.
Crude oil settled at $72.68 on the NYMEX Thursday, an increase of $1.35 over the day prior or nearly 2%. Brent crude closed 99 cents higher at $71.79 on the London ICE Futures.
"Oil prices continue to get a boost from the sentiments that have been driving the market over the past four to six weeks that the economic malaise that we have been in for the last six months has turned a corner and looks like it’s bottoming out," said Gene McGillian, a broker and analyst with Tradition Energy in Chicago. "And we might be seeing the beginnings of a recovery later this year, which will help spark energy demand."
A number of factors have contributed to the rise in the price of oil, all of which point to a recovering economic environment. A report issued by the International Energy Agency revised the group's world oil demand outlook upward. Additionally, imports of crude in China, the world’s second largest oil consuming country, rose to a 14-month high. Stocks surged today on Wall Street, while the value of the US dollar fell. Furthermore, the number of Americans claiming unemployment insurance fell this week, as well.
"It looks as though things are kind of dovetailing nicely for the bull side of the market," McGillian continued. "Whether or not we've started to reach areas where the market is going to be overextended I think is coming into question; but right now, it does look as if we have a little bit more to go."
Alongside today's increase in oil prices, natural gas rose more than 6% in NYMEX trading, up 22.5 cents to close at $3.933 per mmBtu.
With natural gas storage levels nearing 22% higher than the five-year average, the analyst revealed that the rally may be short-lived.
"The gas market's upside potential in the next few weeks is going to be kind of limited," McGillian concluded.
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