Economic concerns halt oil price rally

18 September 2009

The price of crude oil steadied above $72 (€49.04) a barrel on Thursday, despite falling slightly on the back of a dip in the US stock market.

Values have climbed from less than $69 since the beginning of this week, bolstered by a drop in US crude inventories that helped raise hopes of an upturn in world energy demand.

Oil also found support from a series of positive economic data, with Federal Reserve chairman Ben Bernanke this week suggesting the global recession "is very likely over".

However, despite the growing optimism, the US stock market fell on Thursday - bringing an end to a three-day climb and prompting fresh concerns about the strength of the economy.

This also halted the recent oil price rally, as US crude fell four cents to close at $72.47 a barrel, while London Brent crude settled down 12 cents at $71.55.

Home heating oil customers may welcome the dip in the market, as any further increase in crude prices could raise the cost of the domestic fuel.

Darin Newsom, senior analyst at DTN, told Rigzone earlier this week that crude oil does not currently have the strength to push beyond $75 a barrel.

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