Oil prices start to recover

26 September 2007

The price of crude oil started to recover during early trading on Wednesday following three days of downward movement.

US crude for November delivery lost $1.42 to close at $79.53 (£39.40) a barrel on Tuesday, but regained 32 cents in Wednesday morning's Asian trading.

Similarly, the price of London Brent crude slipped by $1.29 on Tuesday, but regained 18 cents to reach $77.80 on Wednesday morning.

The price falls were largely due to the news that oil production had returned to normal in the Gulf of Mexico after workers returned to offshore facilities, having been evacuated before the weekend because of the threat posed by a storm which eventually failed to turn into a hurricane.

Despite the return to full output in the region, concerns about the supply of oil continue ahead of the high demand fourth quarter.

The US Energy Information Administration is due to publish its weekly report on oil stocks on Wednesday and if it reveals a further fall in the country's crude inventory, prices are expected to rise still further.