Oil prices rise on economic optimism

14 May 2009

15 May 2009 | Jake Kanter

Oil prices steadily increased last month amid "improved sentiment" over economic conditions, according to the Organisation of the Petroleum Exporting Countries (Opec) monthly report for May.

Prices in April rose to an average of $50.20 (£33) a barrel, up 10 per cent on March. The Opec crude oil basket price today was $55.99 (£36).

In April prices were pushed up by positive developments in the world economy, the report said, such as "the rally in the stock markets" that improved confidence. But it warned that oil markets were still volatile and the recovery was yet to take hold.

Opec raised output from 28.1 million barrels a day to 28.3 million barrels last month after nearly a year of making record cuts to production.

Despite the upturn, Opec predicted that average demand would fall from 31 million barrels a day in 2008, to 28.8 million barrels a day this year.

It said "continuous downward revisions" of the economy were still "exhausting" world oil demand and the recent outbreak of swine flu dampened uptake of aviation fuel.

SMmay2009

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