NEW YORK, June 9, 2009 (AFP) – New York oil prices closed Tuesday above 70 dollars per barrel for the first time since November amid hopes of an economic recovery and US dollar weakness.
The United States is using unconventional measures such as mopping up bonds from the market to prevent interest rates from rising, after bringing down federal fund rates to virtually zero percent to stimulate economic recovery.
Data indicating that the worst may be over for the recession-battered US economy, the biggest in the world, are stoking hopes of a rebound for energy demand.
“The bounce in commodity prices is likely to be sustained while… expectations of recovery continue to build,” London-based consultancy Capital Economics said in a note.
It cautioned however that “disappointment at the strength of the economic expansion should take the heat out of the latest rally.”
“It is a simple story: weak dollar, strong market, plus flow of funds from commodities investors,” added Deutsche Bank analyst Adam Sieminski.
After plunging from record highs above 147 dollars last July on supply concerns, oil prices touched multi-year lows in December, at one point nearing 32 dolla