Oil prices bounced back yesterday, ending this week's 8 per cent slide as supply fears were rekindled ahead of the winter heating season and dealers squared their books in advance of next Tuesday's US presidential election.
US light crude settled up 84 cents to $51.76 (€44.68) a barrel, less than $4 below the peak $55.67 hit earlier this week, while London Brent crude rose 61 cents to $48.98 a barrel.
"Given all the worries including concern about a terrorist attack in advance of elections, it's not surprising to see prices up here," said Mr John Kilduff, senior vice-president at Fimat USA. The rebound came as fears were rekindled over slim fuel stockpiles in the US, Europe, and parts of Asia heading into the high-demand northern hemisphere winter.
In the US, the world's largest energy consumer, supplies of heating oil and other distillates are lagging about 12 per cent below a year ago and have been slow to build due to strong demand and disruptions to energy operations in the Gulf of Mexico after Hurricane Ivan.
"We think [ this week's sell-off was] simply an interruption of the trend and not the end of it. Nothing fundamentally has changed," said Mr Kevin Norrish of Barclays Capital.
Oil producers in the Gulf of Mexico remain at around 80 per cent of their 1.7 million barrels per day of capacity after Ivan thrashed through the region more than a month ago. - (Reuters)
