Oil rose to nearly $49 a barrel yesterday in Asia, brushing off news of increasing U.S. crude supplies, as traders take heart from rallies in global stock markets as an indication of overall investor optimism.
Benchmark crude for April delivery rose 71 cents to $48.85 a barrel by midday in Singapore on the New York Mercantile Exchange. Prices rose fell $1.02 last Wednesday to settle at $48.14.
In London, Brent prices rose 94 cents to $48.60 on the ICE Futures exchange. But others cautioned that oil prices will not go much higher because the outlook for the global economy remains murky.
Some analysts still doubt oil demand from developed countries, which is still reeling from a financial crisis and severe recession, can justify sustained trading above &50 a barrel.
'There is still plenty of uncertainty about the U.S. economy,' said Garard Burg, minerals and energy economist with National Australia Bank in Melbourne. 'Demand remains broadly weak. It's likely we'll see a pull back.'
Oil is up despite signs that U.S. crude supplies are rising. The Energy Information Agency reported crude inventories rose 1.94 million barrels for the week ended March 13. The 353.3 million barrels of crude is the highest reported level in U.S. inventories since June 29, 2007.