US crude prices fell below $72 today on oversupply worries after hitting the highest level since late June while Brent prices briefly touched a record for 2009.
A rally of more than 1 per cent in European shares sparked the initial jump but persistent concerns about surplus stocks in the world's largest energy consumers pared early gains.
US crude fell 34 cents to $71.63 a barrel this morning after touching a six-week high of $72.42 earlier in the day. ICE Brent crude prices fell by 36 cents to $75.15 a barrel after earlier hitting a new 2009 high of $76.
US crude inventories rose by a much-higher-than-expected 1.7 million barrels in the week to July 31st, according to data from the US Energy Information Administration yesterday.
The correlation between equity markets and oil prices is currently strong and such external factors are partly responsible for the rally which has lifted oil prices from lows of below $33 a barrel last December.
Analysts said that key data coming out of the United States in the next two days is likely to serve as a guide for the oil market.
US jobless data are set to be released this afternoon and non-farm payroll figures will be published tomorrow.
Reuters