London: Oil surged more than $3 a barrel yesterday, above the $109 level, lifted by a strong rally in gas oil and as optimism that banks will manage to shore up the financial system fuelled buying across commodities and equities.
A surge in gas oil, the benchmark for heating oil and diesel in Europe, on concern of tight supply boosted US heating oil and pushed crude higher, analysts said. Gas oil hit a record high of $1,005 a tonne.
“It’s the gas oil situation in Europe that’s pushing up Nymex heating oil,” said Tom Knight, a trader at Truman Arnold in Texas.
US crude rose $2.77 to $109.00 a barrel by 1608GMT, easing off highs of $109.48 hit earlier. London Brent crude traded up $2.24 to $107.14 a barrel.