Crude oil futures have burst above the $US80 a barrel level for the first time in four months driven by strong investor confidence in a global economic recovery.
At the same time, the BP oil spill in the Gulf of Mexico is rapidly disappearing – from the sea and the headlines.
In New York, light, sweet crude for September delivery settled up 3%, or $US2.39, at $81.34 a barrel and trading in Singapore today has stayed above that level.
Brent crude on the London ICE futures exchange gained $US2.64, or 3.4%, at $80.82 a barrel and has also risen in subsequent electronic trading.
The surge in oil prices and other commodities follows a strong showing on world equities markets after July manufacturing indexes in the US, the euro zone and the UK all came in better than expected.
The reports boosted confidence that economic growth continues, after several weeks of mixed indicators. Similar optimism about future-commodity demand caused oil prices to double in 2009, though repeated forays above $US80 a barrel since October have been followed by rapid retreats.
Climatic and political threats that could drive oil prices further are muted rather than absent.
A tropical depression has formed in the middle of the Atlantic Ocean, but so far is less than the threshold to be declared a tropical storm.
August and September are the most active months of the Atlantic hurricane season and storms can threaten states along the US Gulf of Mexico, which account for 31% of US oil output and 43% of the country’s refining capacity.
Meanwhile, London’s Daily Telegraph says the BP oil slick – touted as the worst in world history – has all but disappeared:
The sea's warm surface and oil-munching bacteria have dissipated the slick to such an extent that a planeload of journalists had to fly for an hour before their pilot could find a patch of oil. His relief, according to one reporter on board, was comparable to the anxious captain of a tourist boat spotting a distant pod of dolphins.
In fact, the Telegraph says,
With the gush plugged for the past two weeks, experts are beginning to question whether the BP spill can really be called an environmental disaster at all.
Tue, 03 Aug 2010