Brighter US news sends oil prices up

May 30 2009 by Iain Laing, The Journal

OIL prices hit a six-month high yesterday as US stockpiles decreased as the American economy is not declining as fast as had been thought.

US light crude for July delivery rose by US$1.16 to US$66.24 a barrel, before falling back to $65.77 after the Energy Information Administration said US oil supplies had dropped for the third week in a row.

The country’s economy does not appear to be shrinking as quickly as believed according to a report from the Commerce Department which showed that first quarter GDP saw a 5.7% contraction which had been revised down from an initial 6.1% fall.

On Thursday, Opec oil ministers had decided not to change output and fuelled optimism that prices are set to rise. The Saudi oil minister predicted prices will reach $75 this year.