Crude prices tumble on demand concerns

16 March 2010

Written by Kim Bardsley

Crude oil prices fell for a second day on the New York Mercantile Exchange this morning (March 16th), with a strong dollar and demand concerns weighing on investors' minds.

The headline crude contract dipped below $80 (£53) a barrel yesterday as the dollar rebounded against the euro and other major competitors and many traders reflected on whether recent gains may have gone too far.

Both crude and heating oil prices closed the week up on Friday March 12th, with the latter closing above $2.10 a gallon. After sharp losses yesterday, it is now trading around the $2.05 mark.

Speaking to Bloomberg, David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney, commented: "Some of the commodities, and oil is one, are getting up to high price levels relative to recent trading ranges and that has caused some investors to back off a bit."

Despite signs of economic recovery in the US and other key markets, there is lingering concern about demand for crude products, he said.

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