Oil prices bounce back towards $67

31 July 2009

Crude oil prices climbed more than five per cent on Thursday, cancelling out the previous day's losses as hopes of an economic recovery grew.

US crude rose by $3.59 (£2.17), or 5.7 per cent, to close at $66.94 a barrel, while London Brent crude settled up $3.58 at $70.11.

The gains came after a series of strong corporate results and positive economic data helped lift equities and brought fresh confidence that the worst of the recession may soon be over.

Analyst at BNP Paribas Tom Bentz told Reuters: "Markets are rebounding with stocks higher, renewed optimism and a weak dollar."

The upturn comes after oil prices plunged by 5.8 per cent on Wednesday as figures revealed a bigger-than-expected increase in US crude inventories.

According to BP chief executive Tony Hayward, any recovery in global energy demand is likely to be "long and drawn out", meaning values are unlikely to rise much further in the coming months.

He claimed prices within a range of $60 to $90 a barrel represented a "sensible" level given the current financial climate.

Click here for a home heating oil quote.