World oil prices rose by more than a dollar in Asian trading this morning after sharp falls overnight in response to a bigger-than-expected rise in US crude reserves.
In morning trade, New York's main contract, light sweet crude for June delivery surged $1.35 to $114.81 per barrel from $113.46 at the close of floor trading in the US last night.
The contract had earlier traded at an intraday high of $115.23 before easing. At current levels, New York oil prices have slid by more than $5 since striking an all-time high of $119.93 on Monday.
London's Brent North Sea crude June delivery rose $1.36 to $112.72.
The latest price surge may be short-lived if the dollar continues to recover against the major currencies and worries over energy demand flare up again, traders said.
The Federal Reserve yesterday cut the federal funds rate by a further quarter-point, as expected, to 2 per cent. The US central bank also decided to lower the discount rate it charges banks by 25 basis points to 2.25 per cent.
The dollar was generally stable after the widely expected rate cut.
The US currency fell to a record low of 1.6019 to the euro on April 22nd but has since recovered, changing hands at around 1.5634 in Asian trading today.
Bloomberg