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NEW YORK: The price of New York oil jumped on Friday to a 2009 high above 74 dollars, propelled by a weak US dollar, tumbling American crude reserves, rising equities and positive eurozone data, traders said.
New York's main futures contract, light sweet crude for delivery in October, closed 98 cents higher at 73.89 dollars per barrel, after soaring to 74.72 dollars - a level last seen on October 20, 2008.
London's Brent North Sea oil for October gained 86 cents to close at 74.10 dollars per barrel, after hitting 74.97 dollars.
"Overall, the market went up this week as we saw better economic news out of Germany and France, and more demand from China. So there is a lot of economic optimism," said Andy Lipow, Lipow Oil Associates.
"And then this morning in the US, we got better home sales," he said as Wall Street stocks soared Friday on a record jump in existing home sales in July and Federal Reserve chief Ben Bernanke's comments that global recovery prospects "appear good."
In a further sign that the recession in the world's largest energy-consuming nation is easing, the National Association of Realtors reported that US existing home sales surged 7.2 percent in July to a seasonally-adjusted annual rate of 5.24 million units.
The oil price rally also stemmed from a weaker dollar and depleting US inventories.
"It's the dollar ... and supportive data from Wednesday" about falling US inventories, VTB Capital analyst Andrey Kryuchenkov said in explaining the latest price rise.
The euro leapt as high as 1.4376 dollars on Friday after a key purchasing managers index improved to the break-even point in August after a long contraction, providing a further sign that the eurozone economy was stabilising.
A weaker dollar tends to stimulate demand for dollar-priced crude oil, which becomes cheaper for buyers using stronger currencies. In turn, that pushes prices higher.
New York crude has now soared by about 9.5 percent this week amid rising European and US stock markets.
Prices spiked on Wednesday after the US Department of Energy (DoE) said American inventories of crude fell a massive 8.4 million barrels last week, indicating that demand was recovering.
That snapped a three-week run of gains and took traders completely by surprise, with the market having expected an increase of 1.5 million barrels.
In July last year, oil had hit record peaks above 147 dollars before collapsing to 32 dollars in December due to weak energy demand arising from the effects of the world financial crisis.
The market has since clawed back ground on hopes of economic recovery. - AFP/de
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