Price of oil rises as China's economy surges

October 23, 2004|By BLOOMBERG NEWS

Crude oil closed above $55 a barrel in New York yesterday for the first time after China said its economy grew by 9.1 percent, more than expected, in the third quarter. Oil's rally lifted heating oil to a record and natural gas to a 20-month high.

China surpassed Japan last year as the world's second-largest oil consumer after the United States. Chinese oil use is expected to jump 15 percent to 6.3 million barrels a day this year, the International Energy Agency said. Oil has also risen on concern that U.S. stockpiles of heating oil are insufficient to meet winter demand.

Crude oil for December delivery rose 70 cents, or 1.3 percent, to $55.17 a barrel on the New York Mercantile Exchange. Prices reached $55.50, the highest intraday price since futures began trading in 1983.

"What strikes me is that we are maintaining these highs without any new supply threats," said Michael Fitzpatrick, vice president of energy risk management with Fimat USA in New York.

The average U.S. retail heating-oil price advanced to a record $1.988 a gallon for the week that ended Oct. 18, the Energy Department said. It is the highest since the government began conducting the weekly survey of fuel retailers in October 1990.

The average U.S. retail price for regular-grade gasoline rose 4.2 cents the past week to $2.035 a gallon. Diesel reached a record $2.18 a gallon, according to a department report Monday.

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