Oil price expected to rise this year

25 March 2009

Crude oil prices could begin to rise again in the second half of 2009 as Opec production cuts continue to effect the market, analysts have claimed.

The cartel announced earlier this month that it would not be reducing supply further, instead choosing to focus on enforcing tighter compliance with existing targets.

Analysts suggested that this has already helped strengthen prices, with increased compliance likely to ensure that the oil market tightens in the coming months.

Deputy executive director of the International Energy Administration Richard Jones said this will "provide further support" for crude oil prices, which are likely to recover from the recent slump.

Speaking to Reuters, he stated: "The market has likely only paused to catch its breath rather than moved into a prolonged period of lower prices."

This could encourage home heating oil customers to purchase supplies of the fuel at current costs to avoid the effects of any potential increase in crude prices later this year.

Oil prices rose slightly on Tuesday to prolong the recent recovery, with US light crude up 18 cents to settle at $53.98 (£36.85) a barrel.

London Brent crude climbed 3 cents to close at $53.50.

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