Page last updated at 20:52 GMT, Thursday, 30 July 2009 21:52 UK

Price of oil bounces back sharply

Oil worker in Iraq
Oil prices volatility remains despite recoveries since the start of the year

Sharply higher global stocks have pushed oil prices higher, clawing back almost all of Wednesday's big falls.

US light crude was up $3.66, or almost 6%, to $67.01 a barrel, while London Brent was ahead by $3.68, at $70.21.

US light crude slumped $3.88 on Wednesday after figures showed a rise in US oil stockpiles, indicating too much supply in relation to demand.

Renewed confidence in stock markets, sparked by a series of encouraging corporate results, caused the rebound.


With Japan's Nikkei ending up 0.5%, Europe's main markets closing about 2% higher and the Dow Jones in the US up 1.7% by mid-afternoon, investors' confidence in future oil demand returned.

But some analysts expressed concern at the volatility in the oil price, particularly as the bounce was sparked by sentiment rather than oil-related news.

"You need to really worry about a market that sells off on a very large build of supply one day, and then rebounds on no headline at all," said analyst and trader Stephen Schork.

In July last year, the price of oil peaked at around $147 a barrel, before falling back to close to $30 at the start of 2009 due to the impact of the global recession.

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