Crude oil prices up six per cent

21 January 2009

Crude oil prices rallied on Tuesday as values rose by as much as six per cent.

The market has experienced a downward slide since prices reached record highs of $147 (£107) a barrel last summer.

This has prompted Opec to enforce a number of production cuts as the global economic slowdown has continued to reduce demand for oil across the US and Europe.

US crude prices rose $2.23 to settle at $38.74 a barrel as traders sought to purchase futures for February delivery before the contract expired on Tuesday.

Meanwhile, March crude futures fell $1.73 to $40.84, while London Brent closed at $43.62 - a fall of 88 cents.

Home heating oil customers may see prices become more consistent following Opec's supply curbs, which analysts claimed could help balance out the market.

Christopher Bellew, a broker at Bache Commodities, told Reuters: "The Opec cuts are stabilising the markets, even if they are not making it go up very much."

However, an agreement between Russia and Ukraine to resume gas supplies to Europe, as well as the ceasefire in Gaza, could help reduce any upward pressure on prices.

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