Oil climbs back above $72

28 August 2009

The oil market saw an end to the recent slump on Thursday as prices bounced back above $72 (£44.22) a barrel, despite having slipped to less than $70 earlier in the day.

US crude sank as low as $69.83 in morning trading as concerns over weak demand and building inventories continued to put downward pressure on values.

However, news of a smaller-than-expected decline in gross domestic product and positive jobs data in the US helped bolster the stock market and push oil prices back up.

The value of the dollar was also down against the euro, making commodities more attractive to overseas investors and traders.

As a result, US crude for October delivery eventually settled up $1.06 at $72.49 a barrel, while London Brent crude gained 86 cents on the previous day to close at $72.51.

The news may prompt home heating oil customers to stock up on supplies of the domestic fuel at current costs, with crude prices tipped to rise further by some analysts.

According to Edward Meir of MF Global, values could move towards the $80 mark in the next few months if the current economic optimism persists.

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