Oil prices rise on back of OPEC discipline, US economic recovery

With OPEC maintaining discipline and signs of a partial recovery in the US economy, the price of crude has risen for the sixth straight session. Last week a barrel of oil could be bought in New York for $US20.50 while Brent Crude was trading at $US19.35 a barrel (bbl) in London.

According to industry watchers, production of oil has fallen by almost 1.4 million barrels of oil per day (bopd) from December levels. OPEC had pledged to reduce daily supply by 1.5 mmbopd, which came into effect on 1 January.

On the demand side, International Energy Agency said the demand for oil last year grew at the slowest rate since 1985, however, it expected an economic recovery in the US to increase American demand by almost three per cent this year to an average of 19.9 mmbopd.