US Oil Prices Rise Sharply due to Strong Domestic Demand

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  • Pipa gas Pertamina. ANTARA/Widodo S. Jusuf

    Pipa gas Pertamina. ANTARA/Widodo S. Jusuf

    TEMPO.CO, Jakarta - Oil prices in the United States (US) rose sharply at the end of trading on Monday evening (Tuesday morning, Jakarta time), marking the beginning of a week which will be see a lot of economic data being released. The releases are expected to bolster investor's confidence in US' economic recovery.

    The prices of November deliveries for the US benchmark - the light sweet crude oil, or the West Texas Intermediate (WTI) - rose by US$1,03 to close at US$94.57 per barrel at the end of trading at the New York Mercantile Exchange.

    Prices for November deliveries of European benchmark - the Brent crude oil - also rose by 20 cents to stabilise at US$97.20 per barrel at the end of trading in London.

    Matt Smith, an analyst from Scheneider Electric, said that the gains are caused by investors who are preparing their stance following the upcoming release of a series of economic data this week.

    A number of the economic data that is due to be released in the world's largest oil-consuming country includes consumer confidence index for September, and monthly job figures for September by the US Department of Labor.

    The US Department of Energy is also due to release its weekly report on US oil reserves on Wednesday, after publishing last week's release that showed a sharp dip in US oil reserves.

    On Monday, the US Department of Trade reported that consumer spending in the US rose by 0.5 percent in August, while personal income rose by 0.3 percent in the same period.

    These US data came amidst worries about the economic slowdown in Europe and China.

    Gene McGillian, a broker and analyst at Tradition Energy, said that WTI's prices are pushed up by strong demands by US consumers in September. Meanwhile, the Brent crude is experiencing a downtrend after Libya announced that it has normalised oil production from its fields to 900,000 barrels daily, from the previous 200,000 barrels per day.

    ANTARA | DESY SAPUTRA