Oil skids on weak equities, subdued demand

29/07/2009

The ten-day rally in oil prices came to an abrupt end yesterday (July 28th), with the commodity falling sharply after a weak performance in equity markets and persistently subdued demand for crude products in the US.

In trading this morning, the headline New York Mercantile Exchange futures contract skidded further, hitting $65.68 (£40.15) per barrel 05:36 Eastern Time, down $1.54 on yesterday's settle price.

Yesterday, the Wall Street Journal reported that the bullish run seen in commodities such as crude and heating oil is broadly expected to be sustained.

Jim Ritterbusch of Ritterbusch and Associates, commented: "We're declaring this bull move intact for now. We are leaving open the possibility of a $70 handle during the next few sessions."

He concluded that weak demand data for crude and other petroleum commodities such as heating oil from the Energy Information Administration and the American Petroleum Institute would only halt the upward price movement temporarily.