Crude teeters above $40

23/02/2009

The new baseline crude contract on the New York Mercantile Exchange has held its position above $40 (£27.40) a barrel during trading this morning (February 23rd).

Following the expiry of the March delivery contract on Friday at $38.95 a barrel, the April futures agreement has pushed its way above $40 despite the preponderance of gloomy economic data from the US and elsewhere.

By 6:01 Eastern Time, the commodity had gained 28 cents to stand at $40.31 a barrel, despite the announcement that US retail giant JC Penney saw profits slide 51 per cent in the fourth quarter of 2008, indicating plummeting consumer confidence.

"The macroeconomics news has been nothing but gloomy, especially on jobs, which really affects the real economy," said Victor Shum, an energy analyst with consultancy Purvin & Gertz, speaking to the Associated Press.

Confidence in the American economy has had an acute dampening effect on demand for crude and derivatives such as heating oil, DERV and petrol in recent months.