Oil steady for second day

21/08/2009

Crude oil prices were stable above $73 (£44) a barrel in electronic trading on the New York Mercantile Exchange this morning (August 21st), levelling out for a second day after surging more than $5.

Wednesday's gains came after the Energy Information Administration (EIA) showed an unexpected dip in crude, heating oil and gasoline inventories, with the announcement sparking a rally in commodities and equities markets around the world.

Today, commodities were holding steady despite altogether less bullish data from the US Labor Department which showed that the number of people seeking benefits climbed unexpectedly last week.

Speaking to Ben Westmore, a strategist at National Australia Bank, said that the EIA data was also being scrutinised after it emerged that the stock shortfall was attributable in large part to falling imports.

"Wednesday's inventory report was definitely positive for the market, but the data is volatile and you need to see a trend forming rather than a one-off decline before it gets fully priced into the market," he explained.