Oil retreats after surge

12/06/2009

Oil traders have pulled back from the dramatic three-day surge in oil prices which took the commodity to an eight-month high on the New York Mercantile Exchange.

During electronic trading this morning (June 12th) the July crude contract had fallen to $71.64 (£43.59) a barrel, down $1.04 on yesterday's settle price.

Edward Meir, analyst with MF Global in Connecticut, told Bloomberg that the slump is evidence that the market was getting ahead of itself.

"Most commodity markets are still quite overbought and could be subject to a modest sell-off next week," he said.

Heating oil prices have also enjoyed a strong rally this week, while petrol prices have been rising both on wholesale markets and at the pumps.

Mr Meir added that traders may have been taking a rose-tinted view of the prospects for economic recovery this week, pushing crude and energy commodities such as heating oil up unnaturally.