Oil Prices Up Nearly $2 Despite Weaker Demand

New York, NY, May 18, 2009--Oil prices rose nearly $2 to around $58 a barrel Monday as traders considered whether last week's push to above $60 was justified amid signs of weak crude demand but rising stock markets.

Benchmark crude for June delivery was up $1.82 cents to $58.16 a barrel by mid-afternoon in Europe in electronic trading on the New York Mercantile Exchange. On Friday, the contract dropped $2.28 to settle at $56.34.

In London, Brent prices rose $1.94 to $57.92 a barrel on the ICE Futures exchange.

A series of lower forecasts for world oil consumption last week undercut investor optimism that a global economic recovery was imminent. The International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries all cut crude demand expectations.

"However hard commentators try to talk up the economy, we cannot escape the fact that oil demand is showing no signs of improving," said analysts at KBC Market Services in London.