Oil prices rebound, London back above 70 dollars
Sunday, 19 August 2007
NEW YORK, Aug 18 (AFP): Oil prices rebounded yesterday on news of US Federal Reserve action to ease a credit crunch and a major hurricane plowghing toward the Gulf of Mexico, home to critical energy installations.
New York's main futures contract, light sweet crude for delivery in September, climbed 98 cents to close at 71.98 dollars per barrel.
In London, the price of Brent North Sea crude for October delivery rose 67 cents to settle at 70.44 dollars per barrel.
Oil prices endured a volatile week, rebounding yesterday after the US Federal Reserve moved to ease a credit crunch crisis that traders fear will cause a global economic slowdown.
Worries about the credit crisis roiled the oil market this week because any slowdown in economic growth reduces demand for oil.
In a move aimed at boosting the liquidity of commercial banks, the US central bank slashed its discount rate-the short-term loan rate it charges banks-by a half-per centage point to 5.75 per cent.
Fears that Hurricane Dean could damage energy installations in the Gulf of Mexico next week also drove prices higher. The storm intensified into a major, category-three hurricane as it moved across the Caribbean in the direction of the gulf.
Still, some analysts warned that prices could drop again next week in a continuation of volatile trading conditions.
It was a roller-coaster week for oil prices, in line with disruptions on other markets as the US credit worries spread around the world. Crude prices plunged Thursday as hefty declines on world stock markets left traders fretting about potentially risky investments in the commodities markets.
Traders had said that some speculators and investment funds were moving cash into more secure investments and out of riskier holdings, and that some of this movement had dented the oil market.
Oil prices rallied Friday, however, supported by the Fed action, Hurricane Dean and fresh unrest in Nigeria, Africa's biggest oil producer.
New York's main futures contract, light sweet crude for delivery in September, climbed 98 cents to close at 71.98 dollars per barrel.
In London, the price of Brent North Sea crude for October delivery rose 67 cents to settle at 70.44 dollars per barrel.
Oil prices endured a volatile week, rebounding yesterday after the US Federal Reserve moved to ease a credit crunch crisis that traders fear will cause a global economic slowdown.
Worries about the credit crisis roiled the oil market this week because any slowdown in economic growth reduces demand for oil.
In a move aimed at boosting the liquidity of commercial banks, the US central bank slashed its discount rate-the short-term loan rate it charges banks-by a half-per centage point to 5.75 per cent.
Fears that Hurricane Dean could damage energy installations in the Gulf of Mexico next week also drove prices higher. The storm intensified into a major, category-three hurricane as it moved across the Caribbean in the direction of the gulf.
Still, some analysts warned that prices could drop again next week in a continuation of volatile trading conditions.
It was a roller-coaster week for oil prices, in line with disruptions on other markets as the US credit worries spread around the world. Crude prices plunged Thursday as hefty declines on world stock markets left traders fretting about potentially risky investments in the commodities markets.
Traders had said that some speculators and investment funds were moving cash into more secure investments and out of riskier holdings, and that some of this movement had dented the oil market.
Oil prices rallied Friday, however, supported by the Fed action, Hurricane Dean and fresh unrest in Nigeria, Africa's biggest oil producer.