Oil stalls after another strong gain

27/02/2009

Crude oil prices have fallen in New York this morning (February 26th) after strong gains seen yesterday.

On the New York Mercantile Exchange, crude contracts for April delivery stood at $44.18 (£31.12) a barrel by 4:10 Eastern Time, down $1.04 since the start of electronic data.

Yesterday, the commodity continued a week-long rally and peaked above the $45-a-barrel mark before retreating to $44.72 a barrel.

Heating oil has also enjoyed a week of consecutive rises as data from the US Energy Department indicated that demand for crude was stronger than many investors and analysts had expected.

Mark Pervan, senior commodities analyst at Australia & New Zealand Bank, told Reuters that today's falls may be a sign of a correction to the rally.

"The boost [in oil prices] was sort of an instant reaction to the weekly inventory data and strong demand for gasoline. I think the market went ahead of itself," he told the news agency.