Brent crude jumps to $124 on strong US equities

Oil was up in the Asian trade today, boosted by a stronger close on the Wall Street overnight, analysts said.

New York’s main contract, light sweet crude for delivery in June, rose 53 cents to $111.98 a barrel, while Brent North Sea crude for June gained 38 cents to $124.23.

“The US stock market was up very well yesterday, and we’re seeing a rebounding in the oil market (after losses earlier in the week),” said Mr John Vautrain, a Singapore-based analyst at Purvin & Gertz energy consultancy.

Prices were also lifted by the hopes of increased demand from Japan as the world’s third biggest economy starts to rebuild from last month’s devastating quake and tsunami disasters.

“Japan needs more oil to make power in the absence of nuclear power,” said Mr Vautrain.

Crude prices had closed higher on Wednesday in New York after an unexpected drop in US petroleum reserves and a sharply weaker dollar, which makes dollar-priced commodities cheaper for other currency holders.

The US Department of Energy had reported that crude oil reserves fell by 2.3 million barrels to 357 million barrels in the week ended April 15, contrary to analysts’ predictions of a rise after the previous six straight weeks of increases that added nearly 13 million barrels to reserves.

Gasoline stocks fell for a second week running by 1.6 million barrels. And the stocks of distillates — including diesel and heating fuel — unexpectedly fell by 148.3 million barrels. Total petroleum reserves fell by 6.7 million barrels last week in the United States, the world’s biggest oil consumer.

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