Oil price retreats but stays above $80
Friday, 23 October 2009 16:11Oil prices fell this afternoon on profit-taking at the end of week in which New York crude reached $82 for the first time in a year.
New York's main contract, light sweet crude for delivery in December, fell 71 cents to $80.48 a barrel after rising above $81 earlier today. Brent North Sea crude for December delivery dropped 60 cents to $78.91 a barrel in late London trading.
Crude prices had surged to a one-year high of $82 on Wednesday, driven by a weak dollar and optimism over the global economic recovery, analysts said.
Oil traders were today assessing a mixed batch of global economic data. Industrial orders and business activity rose in the euro zone, figures showed, with economic strength returning across much of western Europe even as Britain's recession dragged on.
British GDP slumped 0.4% between July and September compared with shrinking output of 0.6% in the second quarter, the Office for National Statistics said. Economists had widely expected Britain to exit recession in the third quarter with a return to growth of 0.2% after five quarters of contracting GDP.
The US economy, in a recession since December 2007 and the world's biggest consumer of crude oil, is expected to post its first growth in a year in the third quarter of 2009.
OPEC Secretary General Abdalla Salem El-Badri said in London yesterday that the cartel would consider ramping up crude oil production at its next meeting in December should economic growth improve and other conditions be met.
The cartel 'will not hesitate to increase its production in December,' he said, adding the decision was dependent also on higher oil prices and no floating storage of crude.
The 12-nation Organisation of the Petroleum Exporting Countries (OPEC), whose members pump 40% of the world's crude oil supplies, will hold their next meeting in Luanda, Angola, on December 22.
Oil prices have tumbled from historic highs of over $147 in July 2008 to about $32 in December because of the global recession but have since risen on hopes of recovery.
