Europe oil prices hit 18-month high

15 April 2010

Average Opec and benchmark US prices close to highest levels since 2008

Europe’s benchmark Brent crude oil contract prices hit their highest levels since 2008 on 15 April as positive demand indications continued to support higher commodity prices.

The May Brent contract was trading at $86.63 a barrel on 15 April. It last traded this high on 3 October 2008. The price was up $4 a barrel from a week before.

In the US, the benchmark May West Texas Intermediate (WTI) contract was trading at $85.78 a barrel, lower than the $86.54 a barrel it hit on 6 April, its highest price since 9 October 2008.

The return to late-2008 price levels came as global demand continued to show greater than expected growth, with both the international oil cartel Opec and the Paris-based International Energy Agency (IEA) adjusting their forecasts upward in the first quarter of the year.

The US’ Energy Information Administration reported on 14 April that stocks of crude oil in the country, the world’s largest energy consumer, had fallen 2.2 million barrels to 354 million barrels during the week ended 4 April. This is 12.7 million barrels lower than during the same period of 2009.

Most tellingly, stocks of gasoline fell 1.1 million barrels to 221.3 million barrels despite a higher level of availability. The US consumed a near-record 9.33 million barrels a day of gasoline during the week, according to analysts at Barclays Capital, the investment arm of the UK bank.

The average price for the Opec basket of its 12 member states’ crude oil contracts was $82.63 a barrel on 14 April, the highest value seen since September 2008 and up $0.40 from a week before.

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