Crude climbs back from 16-month low

23/10/2008

Crude oil has made some gains during market trading today (October 23rd) after prices fell to their lowest levels in 16 months yesterday.

On the New York Mercantile Exchange, the main contract - light, sweet crude for December delivery - lost more than $5 (£3) over the course of the day, closing at $66.75 a barrel.

This is more than $80 lower than the peak price reached on July 11th, when it reached $147.27 a barrel.

However, Chakib Khelil, president of the Organisation of the Petroleum Exporting Countries, said that the cartel needed to restrict supply because there was too much oil on the market.

"The question of reduction has to be discussed. Stocks are very high, there is excess of supply, some of us are not able to sell [our] crude," he said to reporters when arriving in Vienna for an emergency meeting.

A poll of 33 analysts conducted by Bloomberg predicted a cut of one million barrels per day.

Such a tightening in supply could well have a knock-on effect for kerosene, DERV and red diesel prices.