Oil flat after sharp drop

20 November 2009

Crude oil prices were relatively flat on the New York Mercantile Exchange this morning (November 20th) after a day of sell-offs witnessed yesterday drove prices down to $77.46 (£46.49) a barrel, down $2.12.

Bloomberg attributed yesterday's slump, which was the biggest loss since November 12th, to a closing off in trading positions before the end of the year.

"Oil and equities have done well and towards the end of the year it may be a time for investors to lock in profit," explained Victor Shum, a senior principal at consultants Purvin & Gertz in Singapore.

"A retraction in oil prices and equities ought to take place," he added. Such downward movements could in turn have an impact on wholesale heating oil prices, which commonly trade in line with wider trends in crude oil prices.

However, heating oil contracts are also subject to seasonal fluctuations during peak periods of demand for the fuel.

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