Oil pares losses on recovery optimism

26/03/2009

Oil prices have reduced losses witnessed yesterday (March 25th) as investors and analysts take comfort in indicators of economic stabilisation.

Yesterday, near-term crude futures dropped on the back of demand data from the Energy Information Administration which showed that energy commodity stockpiles in the US rose across the board last week.

Crude, gasoline, DERV, heating oil and propane stocks all increased, data showed, indicating that demand is still weakening.

However, May delivery crude futures have climbed on the New York Mercantile Exchange this morning, with the contract trading at $53.46 (£36.54) a barrel by 04:46 Eastern Time.

Speaking to Bloomberg, Victor Shum, a senior principal at consultants Purvin & Gertz, said that investors are seeing positive signs of economic recovery after equity markets climbed yesterday.

"Even though the crude oil build is very significant and bearish in that sense, there are some elements of hope there," he said.