Oil prices edge towards $71 on economic optimism

16 September 2009

Oil prices bounced back from recent losses to record a three per cent rise on Tuesday, ending the day's trading at nearly $71 (£43.07) a barrel.

US crude for October delivery settled at $70.93 - up $2.07 on the previous day - boosted by a string of economic data that helped raise hopes of a global turnaround.

Figures from the US showed that retail sales surged by 2.7 per cent during August, marking the highest growth rate since January 2006.

Meanwhile, Federal Reserve chairman Ben Bernanke leant further support to the oil market after claiming the recession is "very likely over" in the world's biggest consumer country.

This helped offset ongoing concerns about the strength of energy demand across the globe, pushing crude prices back above the $70 mark.

However, London Brent crude came under pressure ahead of the contract's expiration yesterday (Tuesday), eventually falling seven cents to close at $67.37.

According to Royal Dutch Shell chief executive Peter Voser, oil prices could soar in the coming years as a result of the recession.

He said the downturn has limited investment in exploration and production, meaning supply may struggle to keep up with demand once the economy picks up.

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