Oil prices headed lower on the first trading day of 2009, reversing a surge that came before the New Year’s holiday.
New York’s main contract, light sweet crude for February delivery, slid 2.03 dollars to 42.57 dollars a barrel in afternoon trade after surging 5.57 dollars to 44.60 on the New York Mercantile Exchange Wednesday.
Markets were closed Thursday for the holiday.
Brent North Sea crude for February delivery was down 1.91 dollars to 43.68 dollars a barrel after surging 5.55 to 45.59 dollars in London Wednesday.
Prices eased because Asian traders thought "that the rally was overdone on Wednesday," said Dave Ernsberger, senior Asia editorial director of Platts, a global energy information provider.
He said prices were in a "stable range" and would remain there until US president-elect Barack Obama takes office on January 20, when his policies toward the US economy, key oil producer Iran, and the Israeli-Hamas conflict in the oil-rich Middle East would have an impact on prices.
Obama plans to spend up to 775 billion dollars on an economic stimulus package, his top aides said recently.
Oil prices soared in the first half of last year, reaching record highs above 147 dollars a barrel in July, before a sharp global economic downturn slashed world demand for energy and pulled prices sharply lower.
Wednesday’s price rise came after the US Department of Energy’s weekly stockpiles report showed an increase in crude reserves in the world’s biggest energy consumer. The report appeared to disappoint some investors.
"Maybe (traders) were expecting a little bit more," said Andy Lipow at Lipow Oil Associates.
With demand curbed by recession in some of the world’s biggest economies, prices risk slumping further this year, according to analysts.
"The relentless cadence of dismal economic news will probably keep energy prices on the defensive into 2009, until the scope of the new (US) administration’s stimulus package can be assessed," said Mike Fitzpatrick at MF Global.
