News Column

Oil Prices Climb for 6th Day on Rising US Demand

July 19, 2012
Oil demand is on the rise in the U.S.
Oil demand is on the rise in the U.S.

U.S. oil prices extended the winning streak to the sixth straight day on Wednesday after the latest report showed energy demand in the United States was growing.

According to the Energy Information Administration, U.S. average oil demand increased for the third week in a row.

U.S. crude oil inventories fell by 809,000 barrels last week while gasoline inventories dropped by 1.82 million barrels, contrary to forecasts.

Traders also kept a close watch on the remarks from Federal Reserve Chairman Ben Bernanke when he testified before the Congress for the second day.

Bernanke reiterated that the Fed stood ready to offer more stimulus as needed but stopped short of signaling action in the near term.

"At this point we don't see a double dip recession. We see continued moderate growth," he said, easing some concerns among investors over the economy.

Echoing his assessment, the central bank's Beige Book released Wednesday afternoon said overall economic activity "continued to expand at a modest to moderate pace in June and early July" in the majority of its 12 districts.

Tensions between Iran and some western countries continued to bolster oil prices. U.S. Defense Secretary Leon Panetta said the United States will hold Tehran directly responsible for any attempt to disrupt shipping in the Gulf region and will be able to defeat any Iranian attempt to shut down seaborne commerce.

Oil has gained more than 17 percent since the low it touched last month, largely due to resurfacing worries of disrupted supplies as Iran warned it could close the Strait of Hormuz, a strategic waterway.

When the market closed, light, sweet crude for August delivery rose 0.65 dollars, or 0.73 percent, to settle at 89.87 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for September delivery gained 1.16 dollars, or 1.12 percent to settle at 105.16 dollars a barrel.

Source: Copyright Xinhua News Agency - CEIS 2012

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