Oil prices continue rise above US$61 a barrel on increased refinery production

Oil prices rose Friday as Asian traders reacted to signs that U.S. refineries have begun to increase production and other positive market signs.

Photo: Oil prices continue rise above US a barrel on increased refinery production

Light, sweet crude for May delivery increased 8 cents to US$61.77 in midafternoon Asian electronic trading on the New York Mercantile Exchange. This followed a surge of more than US$2 a barrel the day before after the U.S. government reported more robust refinery usage for the first time in weeks.

Traders also appeared to interpret a decision by the U.S. Federal Reserve to leave its benchmark interest rate unchanged as positive for the market.

The May contract for Brent crude was up 4 cents at US$62.55 a barrel on London's ICE Futures exchange.

But while early Friday trading followed Thursday's rising trend, it was not certain to continue.

"Yesterday's rise might have been partly due to short covering, and I'm not sure whether the rise continues today," Ken Hasegawa of Tokyo brokerage Himawari CX told Dow Jones Newswires.

The U.S. inventory report released Wednesday indicated that refineries are beginning to emerge from their seasonal maintenance period, after weeks of declining utilization, and will soon start demanding more crude oil ahead of the U.S. driving season. The Energy Information Administration reported refineries operated at 86.3 percent capacity last week, up 0.7 percent from the prior week, reports AP.

In other Nymex trading Friday, natural gas futures fell 4.4 cents to US$7.276 per 1,000 cubic feet, and heating oil futures for April rose marginally to US$1.7195 a gallon.