Oil prices resumed their downward spiral today as profit-taking set in after recent strong gains won thanks to hopes of more central bank stimulus to prop up the global economy.
Prices ended on a buoyant note Friday, with both main oil contracts soaring by about 10 per cent. The upward momentum continued into Asian deals today, before dropping back.
“The 20 per cent or so rally in oil prices from their lows is certainly something that cannot be ignored and given how strongly oil and stock prices have been correlating lately this is also a positive development for equity markets,” said Gain Capital analyst Fawad Razaqzada.
Around 1825 IST, Brent North Sea crude for delivery in March was down 73 cents at USD 31.45 a barrel.
US benchmark West Texas Intermediate for March slid 84 cents to USD 31.35 a barrel compared with Friday’s close.
World oil prices and equities had surged late last week on hopes of extra stimulus for Japan and the eurozone.
Before then, the market’s dramatic slump culminated with New York crude collapsing to USD 26.19 per barrel — a level last seen in May 2003.