Oil prices retreat in NY

28 October 2009

Crude oil prices dropped in electronic trading on the New York Mercantile Exchange this morning (October 28th), wiping out gains seen on Tuesday.

At 04:27 Eastern Time, the commodity was trading at $79.12 (£48.35) a barrel, down 43 cents on yesterday's settle price.

The losses came as the US dollar climbed during the Asian foreign exchange trading session, reducing the appeal of dollar-based commodities such as crude and heating oil for foreign investors.

Speaking to Bloomberg yesterday as oil continued to climb, Emmanuel Ng, economist at Oversea-Chinese Banking Corp, predicted: "If we continue to see oil prices climbing higher and higher into 2010, then the ghost of the oil worries will come back and haunt Asia just a little bit, we suspect."

A sustained rally in crude oil prices may also lead to increased domestic costs for products such as heating oil, petrol or gas, as was seen in the summer of 2008, when crude oil prices touched $147 a barrel.

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