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Oil rises above $68 on economic optimism
July 24, 2009 / 3:44 AM / 8 years ago

Oil rises above $68 on economic optimism

<p>A meter measuring barrels of oil sold is seen aboard Chevron's Petronius oil platform, located 100 miles (161km) off the coast of New Orleans, in the Gulf of Mexico on June 3, 2008. REUTERS/Jessica Rinaldi</p>

NEW YORK (Reuters) - Oil rose to top $68 a barrel on Friday on optimism a turnaround in the global economy would lift battered fuel demand.

U.S. crude settled up 89 cents at $68.05 a barrel, the highest settlement since July 1. The gains extended a rally that has pushed prices up more than 14 percent since July 14.

London Brent crude rose $1.07 to settle at $70.32 a barrel, after topping $70 a barrel for the first time since July 1 earlier.

“The market is continuing to feel the strength of economic optimism from the greater financial markets,” said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut.

“I think the strength of the rally is derived mainly from the idea that as we enter the end of this year and early next year, further economic gains will kick demand back in.”

Hopes for a rebound in the economy and demand have helped lift crude off lows below $33 a barrel hit in December, after slumping demand knocked oil from record highs near $150 hit in July 2008.

Europe produced a raft of survey reports on Friday that suggested the worst of the recession may have passed by mid-year and that industrial output has started to stabilize.

However, U.S. consumer confidence waned in late July to the lowest reading since April on growing pessimism about the long-term economic outlook, the Reuters/University of Michigan Surveys of Consumers showed.

U.S. stocks rose as investors snapped up shares of pharmaceutical and energy companies, adding to Thursday's gains which pushed the Dow industrials .DJI over the key 9,000-mark. .N

The dollar slipped as the euro zone data stoked risk appetite, boosting commodities denominated in the greenback. <USD/>

Top oil services provider Schlumberger Ltd (SLB.N) posted a sharp drop in profit on Friday and warned it did not expect a rebound in spending in 2009 by its oil- and gas-producing customers.

Chief Executive Officer Andrew Gould said energy price volatility made it hard for his clients to commit to spending since they would not see any cash flow increase next year unless oil prices rose above their current range of $60 to $70 a barrel.

“Sixty (dollars a barrel) is OK, but it is not going to lead to a rash of activity, whereas I think $70 might be a lot more encouraging,” Gould told analysts on a conference call.

Reporting by Matthew Robinson and Robert Gibbons in New York, Ikuko Kurahone in London and Jennifer Tan in Singapore; Editing by Christian Wiessner

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