World oil prices surged this evening, winning support from rebounding equities, global economic optimism and falling crude inventories in top energy consumer the US.
New York's main futures contract, light sweet crude for delivery in July, jumped $2.85 to $74.84 a barrel. Brent North Sea crude for July leapt $2.25 to $74.55 a barrel in London trade.
Global stock markets rallied today on the back of positive comments on the economic outlook by the head of the US central bank and reports of strong Chinese export growth. Remarks by US Federal Reserve Chairman Ben Bernanke that a fall back into recession was unlikely also helped to steady nerves.
Reports of a spike in Chinese exports suggested demand remains strong enough to keep the global recovery on track. This is just what the markets wanted to hear after months of fears that European debt problems will hit growth prospects.
In addition, the US Department of Energy (DoE) revealed today that US crude reserves sank by 1.8 million barrels in the week ending June 4, indicating stronger demand in the world's leading energy consuming nation. That compared with market expectations for a drop of 700,000 barrels, according to analysts.
Ahead of the US report, the Organisation of Oil Exporting Countries (OPEC) held its forecast for oil demand to rise by 0.95 million barrels a day but was cautious about market trends in 2010.
OPEC also expressed caution about its outlook, in the context of the sovereign debt crisis in Europe and signs of a slowing of growth in China. World demand for oil is set to rise by 0.95 million barrels a day to 85.4 mbd this year, OPEC said, standing by estimates in its last monthly report.
Recent data suggested that growth of demand was slightly higher than had been expected in the first half of the year, OPEC said. But the expected slowing of the rate of economic recovery could affect growth of oil demand in the second half of the year, the report said.
