Oil prices have retreated to their lowest level this month, reflecting heightened investor caution about the pace of global economic recovery. Falling as low as $65.78 per barrel, crude followed major equity markets lower today, following a report on Friday showing a further deterioration in US consumer confidence. The negative sentiment over muted recovery prospects for the world's biggest economy overwhelmed news that Japan had become the third developed nation after Germany and France to pull out of recession. Analysts said the world's third biggest oil consumer, which has now emerged from its longest recession in at least 60 years, faced a long road to a sustained recovery.
"There is now a realisation that coming out of a recession is one thing, but building a recovery is another," Justin Urquhart Stewart, a director of Seven Investment Management in London, told Reuters. Crude's decline today extended a 4.3 per cent slide on Friday. "It's a very weak market," said Christopher Bellew, a broker at Bache Commodities. In addition to the stubbornly high global oil stockpiles that have been overhanging the market, an unusually tranquil Atlantic hurricane season has recently helped to suppress bullish sentiment over oil prices.
tcarlisle@thenational.ae
