(UPDATE) Oil moves back higher after sharp falls
Agence France-Presse
First Posted 11:25:00 07/09/2008
SINGAPORE - Oil prices came back higher Wednesday following a steep fall in the face of warnings from world leaders that record highs were challenging economic growth, dealers said.
New York's main oil futures contract, light sweet crude for August delivery, rose $1.08 to $137.12 a barrel. The contract tumbled by $5.33 to close at $136.04 at the New York Mercantile Exchange on Tuesday.
Brent North Sea oil for August delivery rose 97 cents to $137.40 following a plunge of $5.44 to $136.43 Tuesday in London.
The Group of Eight (G8) rich nations said it was ready to take action to cushion global growth from runaway energy costs, but stopped short of announcing concrete steps at a summit in Japan.
The G8 -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- expressed "strong concern" about oil and food prices, which they said "pose a serious challenge to stable growth worldwide."
Oil prices have roughly doubled over the past year and have sparked protests around the world.
"The people at the G8 were very forceful about how high oil prices could curb economic growth," which traders fear could lead to lower demand for oil, said David Johnson, an oil analyst at Macquarie Securities in Hong Kong.
On Wednesday, G8 leaders held an expanded summit that brought in energy-thirsty China and India as well as other key developing nations.
Sucden analyst Nimit Khamar said many economies face a bleak economic outlook "which could reduce the demand for oil, especially at current prices."
The London Brent contract hit an all-time peak of $146.69 and New York crude struck a record high of $145.85 last Thursday.
Johnson said prices continued to receive support from the "war of words" over Iran's nuclear program.
Oil traders were also awaiting a weekly report on energy stockpiles in the United States to be released later Wednesday.
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