Oil regains upward momentum

22/05/2009

Crude oil prices have moved upwards during electronic trading this morning (May 22nd), halving losses witnessed yesterday.

On the New York Mercantile Exchange, the near-term futures contract rose to $61.58 (£38.71) a barrel, up 53 cents on yesterday's settled price.

Crude finished the day down nearly a dollar after suffering heavy losses in early trading. However, weakness in the dollar on foreign exchange markets encouraged a migration to US-based commodities such as crude and heating oil.

Speaking to Bloomberg, Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich, said: "Today it's the US dollar movement and risk appetite at play. The market has got ahead of fundamentals, but as long as sentiment and risk appetite remain positive, prices might go higher."

The news agency reports that falls in the dollar commonly spur a move to oil and gold, which tend to hold their value against the currency.