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Oil prices drop a little

26 March 2009 10:39 (UTC +04:00)

Baku-APA-Economics. Oil prices dropped Wednesday, following a pull-back in global stock markets and signs of expanding crude inventories, AP reported.
Benchmark crude for May delivery was down $1.08 to $52.90 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract staged a late rally Tuesday to close up 18 cents at $53.98 a barrel.
In London, Brent prices shed $1.04 to $52.47 on the ICE Futures exchange.
Oil prices haven’t climbed much higher because the buying has been driven by stock market gains and not because of a real improvement in global oil demand, analysts say.
Experts expect a build up of 1.4 million barrels in commercial crude oil stocks in the U.S, the world’s largest energy consumer, a Platts survey showed.
Oil prices rallied all last week and again on Monday amid gains in stock markets and optimism about a U.S. government plan to buy up toxic assets from banks to resolve to financial crisis. A weaker dollar has also caused investors to flee to commodities like oil, which have risen more than 30 percent this month.
But with the dollar recovering Wednesday against the euro and the British pound, a possible bullish factor for oil prices was off the table, while the decline of the global economy remained a source of worry.
Russian Finance Minister Alexei Kudrin also warned Tuesday that the recent rise in oil and stock prices may be "temporary," although the price rally led China on Tuesday to raise its benchmark retail price of gasoline and diesel fuel.
In other Nymex trading, gasoline for April delivery fell 1.76 cents to $1.4850 a gallon, while heating oil lost 2.81 cents to $1.4715 a gallon. Natural gas for April delivery was down 3.2 cents to $4.315 per 1,000 cubic feet.